Since the end of World War II, the American dollar has become the most important global currency, occupying a 57.8 % share of worldwide central bank currency reserves as of 2024. The dollar is used worldwide as a stable store of value for investors and central banks as well as a vehicle currency enabling simplified transactions between states. While the USD is still dominant due to the United States’ open market policies and geopolitical influence, de-dollarization efforts have been on the rise especially following the outbreak of the Ukraine War in 2022.
In this regard, the BRICS+ bloc – comprising Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the UAE as of 2026 – has become remarkably active. In 2024, China commenced its planned sale of $138 billion dollars’ worth of ultralong bonds in an effort to stabilize its economy amid rising debt burdens and reduce its vulnerability to US economic policies. In the same year, People’s Bank of China also sold off $53.3 billion in US Treasury bonds in an effort to detach from the dollar by favoring other assets such as gold. The Treasury bills sell-off and ultralong bond issuance both seem to be components of China’s economic strategy wherein the country strives to achieve greater financial independence and economic stability.
BRICS has further seen a rise in the use of respective national currencies for trade settlements. Particularly the use of the Chinese yuan (renminbi) has increased, with 50 % of intra-BRICS trade transactions being denominated in the currency. In response to the EU and US sanctions against Russia after its invasion of Ukraine, Moscow has also increasingly begun to rely on Russian ruble and yuan for trade with China. As of 2023, ca. 60 % of Russia’s foreign trade was settled in Russian ruble and Chinese renminbi, compared to the 2022 average of 20 %. This, combined with a 2023 real-yuan trade agreement concluded between China and Brazil, showcases an increasing attempt to diversify away from dollar-based settlements among BRICS-members.
Apart from trade settlements, BRICS has established multiple financial institutions in an effort to bypass Western-controlled financial systems. The Chinese-operated Cross-Border Interbank Payment System (CIPS) offers an alternative to the SWIFT payment system for yuan-based transactions, linking 4,800 banks in 185 different countries as of 2025. To increase lending in local currencies and avoid economic risks associated with dollar-denominated debt, BRICS countries have also established the New Development Bank (NDB) in 2014, allowing member states to lend without having to adhere to the International Monetary Fund (IMF)’s policy conditions.
Following the 2022 SWIFT ban and economic sanctions against Russia, the issue of de-dollarization has gained particular importance for Moscow, with the country becoming the main proponent of intra-BRICS payment systems and a common member-state currency. The idea of a “new global reserve currency” was proposed by Vladimir Putin at the 14th BRICS summit (2022), gaining support from Brazil and Iran. Despite this, however, the development of a common currency seems rather to be an expression of a long-term ambition held by BRICS members with no clear steps towards this initiative being pursued. In 2024, the Kremlin further announced that a BRICS blockchain-based payment system is being developed. However, the project is still in its early phase and is unlikely to be operational before 2030 given the BRICS members’ lack of coordination and common monetary frameworks.
The BRICS+ members shift toward national currencies in trade settlements and establishment of common banking institutions indicate that the bloc has been making progress in its detachment from the dollar. On the one hand, the greenback maintains its dominant status due to its embeddedness in the world’s most stable and liquid capital markets, and a credible, centralized alternative to the SWIFT payment system is still decades away. Moreover, opinions on de-dollarization differ among the BRICS members; while countries such as Iran, Brazil and Egypt are broadly in favor, India has pursued a pro-dollar stance while attempting to strengthen the Indian rupee’s international status. Indonesia and South Africa, meanwhile, have remained hesitant toward de-dollarization, partly due to the deterrent effect of the Trump Administration’s 2025 tariff threats.
Despite this, the US should carefully observe the recent developments and enact policy changes to dissuade some of the BRICS+ members from further de-dollarization. Such efforts will, however, further be complicated due to the increasingly differing monetary goals of the US and the EU. Following the sharpest decline in the dollar’s value since the 1970s in April 2025, the EU member states have increased their efforts to strengthen the role of the euro by, inter alia, reducing their USD exposure in pension funds and signing independent commercial agreements such as the 2024 EU-MERCOSUR trade deal. A successful internationalization of the euro could allow European countries to reduce their interest rates, while increasing Europe’s strategic autonomy and reducing export dependence. However, challenges remain, since, unlike the US, the EU currently cannot offer a comparable supply of highly-rated government bonds and lacks a centrally integrated capital market.
Given these developments, the US should attempt to revert to its earlier approach of using sanctions as a targeted economic weapon subject to clear and predictable rules. Economic sanctions are currently widely used against more than 60 % of low-income states, with the Trump Administration utilizing tariffs as a bargaining chip. While such a policy may be effective in some cases, overreliance on sanctions might incentivize BRICS countries to come closer together and seek alternative currencies for trade settlements to reduce their dollar exposure. Similarly, the US should consider re-evaluating its trade policy toward the EU, which puts in place 15 % tariffs on most European goods to dissuade European countries from further dollar detachment.
Moreover, similarly to the EU, the US should negotiate selectively instead of treating the BRICS+ as a cohesive bloc and offer mutually beneficial trade deals and USD-based payment methods to emerging economies. A good step in this direction has been the 2025 GENIUS Act establishing a clear framework for efficient blockchain-based payment settlements in stablecoins – a cryptocurrency backed by the US dollar and short-term Treasury bills. By offering positive economic incentives and promoting development finance initiatives in emerging markets, the US could reduce incentives for de-dollarization, while opening new market opportunities for American firms and partially countering the argument that the dollar’s unique status solely benefits the United States.
Recommended readings:
Andreopoulos, Tordoir (2026) The ECB’s Bid to Strengthen the Euro’s Global Role
Council on Foreign Relations (2023) The Dollar: The World’s Reserve Currency
D’Souza (2025) A reality check for BRICS and the lofty dedollarisation agenda
Pistilli (2026) How Would a New BRICS Currency Affect the US Dollar?
Savic (2025) BRICS making incremental progress in dollar-free trade
Zhang (2025) Understanding What BRICS Really Wants: How De-Dollarization Creates An Opportunity to Win Back the Global South