For over a decade, BRICS has been making systematic efforts to reduce reliance on the dollar-centred global financial architecture.

Steps Taken By BRICS Towards Dollar De-risking

• Fortaleza Summit, 2014: At the 2014 Fortaleza Summit, BRICS launched the New Development Bank (NDB) and Contingent Reserve Arrangement (CRA) — the first global financial institutions founded by developing nations, challenging Western dominance.
• Push for Local Currency Use (2015 onwards): After sanctions were imposed on Russia in 2015, BRICS began exploring the idea of using national currencies for intra-BRICS transactions to reduce exposure to the dollar.
• Enhancing Currency Cooperation (2017): By 2017, BRICS agreed to deepen currency cooperation through currency swaps, local currency settlements, and direct local currency investments.
• BRICS Payments Task Force (2020): The grouping decided to set up a Payments Task Force to explore systems that would enable seamless cross-border transactions between BRICS members.
• Kazan Summit, 2024: At Kazan, leaders emphasized strengthening correspondent banking networks and enabling settlements in local currencies, reinforcing the BRICS Cross-Border Payments Initiative.
• Financial Sovereignty and Sanction-free Operations: BRICS aims to enhance financial sovereignty and reduce dependence on the U.S.-led system. The 2024 inclusion of Iran, long under sanctions, reinforces its drive to establish an independent global financial architecture.
• BRICS Symbolic Currency Signal: At the Kazan summit, BRICS unveiled a symbolic BRICS banknote, signalling intent to challenge dollar dominance. 

About BRICS Pay Initiative

• Alternative to SWIFT: The BRICS Cross-Border Payments Initiative (BRICS Pay) is a digital payment platform designed to enable trade in local currencies, reduce dependence on the U.S. dollar, and lessen reliance on SWIFT, advancing BRICS’ financial autonomy.
• Leveraging Existing Payment Infrastructure: BRICS nations already have advanced payment networks — Russia’s SPFS, China’s CIPS, India’s UPI, and Brazil’s PIX — which can be integrated into BRICS Pay to enable interoperable, dollar-independent cross-border transactions.
• External Pressure Accelerating Cooperation: United States aggressive stance toward BRICS could push member nations to unite faster and operationalize BRICS Pay sooner than expected.

Constraints of the BRICS Pay Initiative

• Internal Differences Among BRICS Members: India, China, and Brazil prefer to promote their own platforms internationally—UPI, CIPS, and Pix—which may slow down consensus on BRICS Pay.

Check Out UPSC CSE Books

Visit PW Store

Why a BRICS Common Currency Remains Unlikely

• National Priorities Dominate: Each member, particularly China, aims to internationalize its own currency rather than adopt a shared one.
• No Macroeconomic Convergence: Vast differences in inflation, fiscal policy, and trade structures hinder alignment; the Eurozone’s challenges illustrate the risks of such monetary integration.

Conclusion

A common BRICS currency is unlikely soon, but initiatives like BRICS Pay and local currency settlements pragmatically advance financial autonomy, reduce dollar dependence, and build a sanctions-proof, resilient alternative system.

DOWNLOAD PDF