WASHINGTON, D.C. — The rapid expansion of the BRICS bloc now including Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the UAE is raising alarms about the U.S. dollar’s long-standing dominance in global trade. On Monday, August 25, 2025, Bloomberg reported that the group, representing 45% of the world’s population and 35% of global GDP, is intensifying efforts to reduce reliance on the dollar through initiatives like BRICS Pay and increased use of local currencies.
The BRICS summit in Kazan, Russia, in October 2024 highlighted the bloc’s push for a decentralized payment system using blockchain to bypass the dollar-dominated SWIFT network. “It’s a step toward a multipolar trade environment,” Ramesh Vaidyanathan, managing partner at BTG Advaya, told Bloomberg, noting the potential to lower costs and shield members from Western sanctions. Russia, for instance, now settles 25% of its global trade in China’s yuan, a shift driven by sanctions over its Ukraine invasion.
Despite these moves, the dollar remains the world’s primary reserve currency, used in 88% of currency exchanges and 59% of central bank reserves, per the Atlantic Council. BRICS’ efforts face hurdles:
- Diverse economies make a unified BRICS currency challenging.
- China’s capital controls limit the yuan’s global reach.
- Saudi Arabia and UAE peg their currencies to the dollar.
President Trump has warned BRICS against replacing the dollar, threatening 100% tariffs on exports from non-compliant nations. “Any country that tries should say goodbye to America,” he posted on Truth Social on January 30, 2025. Yet, posts on X suggest growing interest in de-dollarization, with some citing India’s push for rupee-based trade.
Analysts argue the dollar’s dominance, rooted in its stability and use in 90% of oil trades, won’t vanish soon. “No currency has made significant inroads,” said Michael Diaz of Diaz, Reus & Targ. Still, BRICS’ expansion, including oil-rich nations like Saudi Arabia, could shift energy markets, with one-fifth of oil trades now in non-dollar currencies. As BRICS eyes further growth, with over 30 countries applying to join, the bloc’s push for financial autonomy may reshape global trade dynamics, though a full dethroning of the dollar remains a distant prospect.
Source: Bloomberg
