Brazil, which currently holds the presidency of the BRICS, has decided not to move forward with discussions on the creation of a common currency for the block in 2025, according to sources that spoke to Reuters.
Instead, emphasis will be placed on the reduction of dependence on the US dollar by improving cross -border payment systems that facilitate the trade in local currencies. Although this change may seem like a neutral economic policy, it has already attracted strong opposition from the American president Donald Trump, who has warned British nations twice in recent months against undergoing the world domination of the dollar.
Trump’s latest warning, issued in January, came with a direct threat of 100% prices on the Nations of the BRICS if they try to replace the dollar in international trade. In an inflamed article on social networks, Trump said: “There is no chance that the BRICS will replace the US dollar in international trade, or elsewhere, and any trying country should say hello to the prices, and goodbye in America! “
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Aggressive rhetoric highlights Washington’s growing concerns concerning the movements of the block towards financial independence from monetary systems dominated by the West.
However, the sources insist that the monetary discussions of the BRICs are not intended to challenge the United States. One of the sources explained that the objective is to “reduce friction in world trade” by making transactions between the nations of the BRICs more effective. Another has echoed the feeling, saying: “No one wants to create problems, but BRICE countries also want to abandon the idea of exploring this possibility.”
Experts: a BRICS motto is in the long term
While leaders like Brazilian President Luiz Inácio Lula Da Silva defended the idea of a BRICS currency shared in the past, financial experts are largely suitable for such a project would be incredibly difficult to implement. The BRICS block includes savings with very different monetary policies, inflation rates and levels of financial stability. The creation of a common currency which could be managed effectively in these nations would require years, if not decades, of coordination.
Anil Sooklal, Ambassador of South Africa in Brics, previously stressed that the idea of a BRICS currency remains a distant objective rather than an immediate priority.
“There is no clear consensus on key issues such as governance, reserve allowances and alignment of macroeconomic policies. Until these challenges are noted, any exposed of a single currency is purely theoretical, “he said.
The United Nations Development Program (UNDP) has also raised concerns concerning the feasibility of a BRICS currency. A UNDP report in 2023 revealed that African and Latin American economies within the BRICS already have trouble with structural economic weaknesses, which makes the prospect of an even more complex shared currency.
Brazil moves to strengthen the trade in local currencies instead
Given only one currency is out of the table for the moment, the presidency of the Brazil of Brazil focuses on the improvement of commercial mechanisms which allow transactions in local foreign currency, which reduces the need of the US dollar as than intermediary. Managers claim that the initiative will involve the integration of payment systems using advanced technologies such as blockchain, the following standards established by international organizations such as the bank for international establishments (BIS).
Brazil takes lessons from its own domestic success with digital payments. The country’s instant payment system, Pix, launched in 2020, revolutionized transactions, exceeding species, credit and debit card payments. Now Brazilian officials are looking to use similar technology to facilitate cross -border trade between the members of the BRICS.
Another model under study is the payment system for local currency in Brazil (SML), which already allows Brazilian transactions to be adjusted directly between Argentina, Uruguay and Paraguay. However, SML had difficulty adopting due to long settlement times – transactions are currently taking up to three working days to strive. Brazilian officials believe that the integration of instant payment technology could make these transactions faster, more secure and profitable, which ultimately increases trade within the BRICS nations without the need for a common currency.
Brazil will officially present its program for the BRICS at the next summit in July 2025, with key discussions that are expected to take place in South Africa later this month on the sidelines of G20 meetings. The BRICS Bloc, which has developed in recent years to include Egypt, Emiropy, Indonesia, Iran, Saudi Arabia and the United Arab Emirates, is positioned as an alternative economic power plant for financial institutions traditional western.
For the moment, the emphasis is placed on the strengthening of financial cooperation without directly challenging the role of the US dollar. However, Trump threats of 100% prices on the nations of the BRICS suggest that even small steps for financial independence could cause economic reprisals from the United States
