The 11-member Brics group reaffirmed its commitment to enhancing cross-border payment systems during their recent summit in New Delhi, while making no immediate moves toward establishing a common currency. Analysts interpret this stance as a pragmatic adjustment in the bloc’s strategy to reduce reliance on the US dollar, rather than a retreat from the broader goal of de-dollarisation.
A leaders’ declaration released on Saturday outlined the work of the group’s Payment Task Force to develop faster, more affordable, accessible, efficient, transparent, and secure payment mechanisms among member countries. However, Sudhakar Dalela, secretary of India’s Ministry of External Affairs, clarified at a news briefing that there is currently no proposal within Brics to introduce a shared currency.
The concept of a Brics common currency gained attention after Brazilian President Luiz Inacio Lula da Silva proposed the idea in 2023. The notion sparked concern in the United States, with then-President Donald Trump threatening 100 percent tariffs on Brics nations should they move ahead with creating a new currency or replacing the dollar in trade.
Despite this, economists highlight significant obstacles to launching a unified currency within the Brics coalition, which includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, the United Arab Emirates, Saudi Arabia, and Indonesia. Xu Tianchen, senior economist at the Economist Intelligence Unit, pointed to the absence of a joint market, the lack of a centralized policymaking authority akin to the European Commission, and divergent priorities among members over economic sovereignty. These factors complicate efforts toward political and monetary integration necessary for a single currency.
Analysts predict that while a common currency remains unlikely in the short term, member countries will continue pursuing measures that gradually reduce dependence on the US dollar. Xu suggested that an incremental approach could involve each member building its own local currency settlement networks, with interoperability across these systems improving transactions within the bloc.
Matteo Giovannini, a non-resident associate fellow at the Centre for China and Globalisation, expects the group to advance in areas such as using national currencies more extensively for intra-Brics trade, enhancing interoperability between payment and messaging systems, and deepening cooperation on financial infrastructure and settlement processes. He emphasized that although the dollar’s dominance is not expected to be displaced soon, Brics may foster the emergence of a parallel financial ecosystem where the US dollar is no longer the default intermediary for all transactions.
The evolving strategy reflects a recognition of the geopolitical climate and the desire among member countries to create a more diversified international financial framework, emphasizing incremental and pragmatic reforms over ambitious, unified currency initiatives.