Can BRICS Break The Dollar's Grip?

For decades, the U.S. dollar has ruled the world. Whether a Brazilian farmer sells soybeans to China or an Indian company buys oil from the Middle East, chances are the transaction runs through greenbacks. Nearly 80 percent of global trade is still denominated in dollars—even when neither the buyer nor the seller is American.

But a new club of rising powers is asking: why?

The BRICS bloc—Brazil, Russia, India, China, and South Africa—has grown into one of the world's most ambitious coalitions, recently expanding to include heavyweights like Saudi Arabia, Iran, Egypt, Ethiopia, and the UAE. Collectively, the group represents almost half the world's population and an ever-growing share of global output. Now, BRICS is taking aim at the heart of America's financial supremacy: the dollar. There is a concerted and growing effort, led by China and joined by other BRICS members, to reduce dependence on the U.S. dollar for trade and finance.

Cracks in the Greenback's Armor

The dollar's dominance has long been underpinned by U.S. military power, deep capital markets, and trust in its institutions. For Washington, that supremacy brings extraordinary privileges: cheap borrowing, enduring demand for Treasurys, and the ability to enforce sanctions with the stroke of a pen.

But for countries outside the West, those same features can feel like a straitjacket. Russia, for example, saw hundreds of billions in reserves frozen after its invasion of Ukraine, revealing just how vulnerable dollar holdings can be to U.S. policy. Meanwhile, when the Federal Reserve raises interest rates, emerging economies find themselves whiplashed by currency swings they can't control. The motivation for devaluing the dollar is driven by a desire for strategic autonomy and a reaction to U.S. financial power and sanctions.

The message from BRICS capitals is clear: too much of the world's economy depends on Washington's whims.

Trading in Local Currencies

The alternative? Start paying each other in their own currencies.

It's already happening. Russia and China now settle most of their bilateral trade in yuan. India has begun paying for Middle Eastern oil in rupees. Brazil and China signed a deal to trade directly in reais and yuan, cutting out the dollar middleman.

Each of these steps chips away at the dollar's dominance—symbolically if not yet materially. They're proof of concept for what BRICS leaders are calling "de-dollarization."

The Roadblocks

Still, reality tempers ambition. Unlike the dollar, most BRICS currencies aren't freely convertible, making global investors wary. Liquidity is another issue: there simply aren't deep enough markets in the yuan, rupee, or real to replace the dollar on a massive scale.

Then there's politics. While China wants the yuan to take center stage, India and Brazil aren't eager to swap dollar dependence for yuan dependence. Talk of a shared BRICS reserve currency surfaces often but runs aground on mistrust and competing interests.

For all the fanfare, dethroning the dollar is less a sprint than a grind. Investors see the U.S. as politically stable compared to most alternatives. The dollar's dominance is protected by deep capital markets, the network effect, and a lack of credible, convertible alternatives. Internal BRICS rivalries (especially India's wariness of China) prevent a unified challenge.

A Future of Many Currencies

So, what's next? The dollar isn't disappearing anytime soon—the network effects and trust built into the system are too entrenched. But the cracks are widening. Instead of one dominant global currency, the world could drift toward a patchwork of competing blocs: a dollar-led West, a yuan-centered Asia, and a BRICS trade zone increasingly fluent in local currencies.

That shift won't happen overnight. Yet the symbolism of paying for oil in rupees or soybeans in yuan is powerful. It signals not just an economic adjustment, but a geopolitical one: a world less willing to march to America's financial beat.

The Bottom Line

BRICS' campaign to reduce reliance on the dollar is as much about politics as it is about money. It reflects a multipolar world where rising powers want greater say over the rules of the game. The dollar still sits firmly on the throne, but for the first time in decades, challengers are beginning to gather at the gates.

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