BRICS Pushes Alternatives to Counter U.S. Dollar Weaponization

Russia has firmly rejected claims of anti-dollar sentiment, with President Vladimir Putin defending the BRICS bloc's strategy to reduce reliance on the U.S. dollar amid geopolitical tensions. At the 2024 BRICS summit in Kazan, Putin emphasized that the group's goal is not to abolish the dollar but to counter its "weaponization" through alternative financial systems and local-currency trade. The Russian leader stated, "We are not refusing, not fighting the dollar, but if they don't let us work with it, what can we do? We then have to look for other alternatives, which is happening". This aligns with broader BRICS efforts to diversify trade settlements and payment mechanisms, with nearly half of intra-BRICS trade already transacted in local currencies.

The BRICS bloc, now expanded to include 10 member states (Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, UAE, and Indonesia), has accelerated initiatives to reduce dollar dependence. A key development is the BRICS Pay system, a decentralized payment platform designed to facilitate transactions in national currencies, bypassing U.S.-dominated systems like SWIFT. While a common BRICS currency remains aspirational, discussions of a gold-backed "Unit" have gained traction, though no concrete timeline exists. The bloc's combined economic weight-accounting for 37% of global GDP by purchasing-power parity-has bolstered its push for a multipolar financial order.

U.S. President Donald Trump's threats of 100% tariffs on BRICS nations if they pursue de-dollarization have drawn mixed responses. Russian Foreign Ministry spokesperson Dmitry Peskov dismissed the move, stating, "If the U.S. uses force to compel countries to use the dollar, it will further strengthen the trend of switching to national currencies". Meanwhile, Brazil's President Lula da Silva reaffirmed BRICS' commitment to reducing dollar dominance, asserting that "BRICS+ is committed to ending U.S. dollar hegemony no matter what". India, however, has distanced itself from the idea of a unified BRICS currency, with officials clarifying that de-dollarization is not a formal BRICS objective.

Despite these efforts, challenges persist. Divergent economic policies among members, such as China's currency controls and Russia's sanctions, complicate coordination. Additionally, the U.S. dollar's entrenched role in global trade-accounting for 48% of international payment transactions in 2023-remains a formidable barrier. Analysts note that while BRICS' de-dollarization efforts could gradually erode dollar dominance, the greenback's liquidity, stability, and institutional trust make it difficult to replace. For now, BRICS' focus remains on pragmatic steps, such as expanding local-currency trade and testing blockchain-based payment systems.

The BRICS bloc's expansion and strategic alignment reflect a broader shift toward a multipolar world economy. By promoting alternative financial infrastructure and fostering South-South trade, BRICS aims to insulate member economies from Western sanctions and geopolitical risks. However, achieving a cohesive monetary strategy will require overcoming internal divisions and external resistance from the U.S. and its allies. As Putin acknowledged, "The development of anything alternative is more a medium to long-term ambition", underscoring the incremental nature of BRICS' de-dollarization agenda.