Will the BRICS Currency Reshape Global Finance? Key Facts to Know

Brazil, Russia, India, China, and South Africa—as well as new members like Iran and the United Arab Emirates—are actively seeking alternatives to the US currency.   BRICS foreign ministers stressed increasing the use of local currencies in trade to lessen dependency on the dollar in a statement released in May 2025.

In January 2025, Sergey Ryabkov, Russia's deputy foreign minister, asserted that a new payment system that aims to sideline the dollar might eventually encompass other developing countries.

Why the BRICS Currency is the Talk of the Global Economy

1. Challenging the US Dollar’s Dominance

The US dollar dominates global trade, with ~90% of forex transactions and most oil trades historically conducted in dollars. BRICS nations aim to reduce this reliance, driven by geopolitical tensions like US sanctions on Russia and China, and the dollar’s use as a tool for economic statecraft.

A BRICS currency, potentially called the "Unit," could be gold-backed or a basket of member currencies (40% gold, 60% BRICS currencies),

offering an alternative for trade and reserves. This push for "de-dollarization" is seen as a way to assert economic independence and mitigate risks from dollar volatility or sanctions.

2. Economic and Geopolitical Implications

BRICS represents ~45% of the world’s population and 35% of global GDP (PPP).

A unified currency could enhance trade efficiency, reduce exchange rate volatility, and boost financial inclusion via blockchain-based digital payments like BRICS Pay, an alternative to SWIFT. Geopolitically, it challenges Western-led financial systems, promoting a multipolar world order.

However, critics argue it risks increasing dependence on China’s yuan, given China’s economic weight, which could alienate members like India.

BRICS currency could weaken the dollar’s value, impact US sanctions’ effectiveness, and raise costs for American households if demand for dollars drops. Conversely, it could streamline trade for BRICS nations and reduce their exposure to US monetary policy.

Yet, experts like South Africa’s central bank governor argue a full currency union requires improbable steps like a shared central bank.

The debate reflects broader shifts toward currency optionality as a matter of economic security

Five ways Must-Know  About the BRICS Currency :

1. No Confirmed BRICS Currency Release Date—Yet

While speculation about a BRICS currency launch date has fueled excitement, no official timeline exists. Discussions began as early as the 2022 BRICS Summit, where leaders like Vladimir Putin hinted at a new global reserve currency. Sources suggest a potential launch by 2027, with updates expected at the 2025 BRICS Summit in Brazil.

For now, the bloc is focusing on reducing reliance on the US dollar through local currency trading and systems like BRICS Pay. Stay tuned for official announcements to avoid missing key updates.

2. A Gold-Backed Currency Could Shake the Dollar’s Throne

The proposed BRICS currency, potentially called the “Unit,” may be backed by gold or a basket of commodities, unlike the fiat-based US dollar. This move could appeal to countries like China and Russia, major gold producers, aiming to counter US sanctions and dollar volatility.

For traders in countries like India or South Africa, a gold-backed currency could stabilize trade costs but may also increase gold prices globally, impacting your investments.

3. De-Dollarization is Already Happening

The BRICS nations are actively reducing dollar dependency. In 2024, 20% of oil trades were settled in non-US dollar currencies, a significant shift from near-100% dollar dominance.

The BRICS Pay system and blockchain-based settlements are paving the way for a future currency. For businesses in BRICS countries, this means cheaper cross-border transactions, potentially saving billions annually, as estimated for India alone.

4. Geopolitical Challenges Could Delay the Launch

Creating a unified currency is no small feat. Economic disparities, political rivalries (like India-China tensions), and trade imbalances pose hurdles.

South Africa’s central bank governor noted that a BRICS currency requires a banking union and macroeconomic alignment, which could take years. If you’re a policymaker or investor, these complexities mean the BRICS currency announcement may be more gradual than expected.

5. The US Dollar’s Dominance Isn’t Vanishing Anytime Soon

Despite the hype, the US dollar remains the world’s primary reserve currency, dominating 90% of forex transactions.

A 2024 Atlantic Council study suggests the dollar’s role is secure in the near term. For those worried about their dollar-based savings or investments, the BRICS currency may not immediately disrupt your financial plans but could signal a shift toward a multipolar economy