By Patrick Iturra | Asset Manager & Business Strategist

Originally published April 28, 2023 · Updated October 2026

BRICS, De-Dollarization, and the Dollar: Influence Without Monetary Unity

For years, headlines have presented BRICS as the emerging force that could weaken the U.S. dollar, reorganize global finance, and eventually challenge the Western-led monetary system.

That narrative contains a degree of truth.

BRICS has expanded. Its members represent significant populations, natural resources, industrial capacity, and trade flows. Several member countries are actively developing payment mechanisms designed to reduce dependence on the dollar in selected transactions.

But economic influence and monetary unity are not the same thing.

The more closely BRICS is examined, the more visible its structural limitations become.

BRICS has become larger. It has not necessarily become more cohesive.

And that distinction matters.

De-Dollarization Is Real — But Frequently Exaggerated

Countries have legitimate reasons to diversify financial relationships.

Some want to reduce exposure to U.S. sanctions. Others want to lower transaction costs, increase local-currency trade, or build financial infrastructure independent of Western payment channels.

Those developments should not be dismissed.

But they also should not be confused with the creation of a credible replacement for the dollar.

The latest Bank for International Settlements data show that the U.S. dollar was on one side of 89.2% of global foreign-exchange transactions in April 2025, up from 88.4% in 2022. The Chinese renminbi increased its share, but remained far behind at 8.5%. Bank for International Settlements

The IMF’s second-quarter 2026 reserve data tell a similar story. The dollar’s share of allocated foreign-exchange reserves declined to 56.7%, demonstrating gradual diversification, but it remained by far the largest reserve currency. IMF Data

That is not the disappearance of dollar dominance.

It is diversification around a system that remains overwhelmingly dollar-centered.

BRICS De-Dollarization: Influence Without Monetary Unity

One of the strongest narratives surrounding BRICS was the possibility of a common currency capable of challenging the dollar.

That idea has not developed into a functioning monetary union.

And that is not a minor detail.

A common currency requires far more than political agreement.

It requires:

• coordinated monetary policy;
• deep and liquid capital markets;
• compatible legal systems;
• credible institutions;
• mechanisms for resolving financial crises;
• freedom of capital movement;
• and a high degree of political trust.

BRICS does not currently possess that level of integration.

Its members operate very different political systems, economic models, currency regimes, and strategic alliances.

The bloc has therefore concentrated more heavily on local-currency trade, cross-border payments, and alternative settlement infrastructure rather than true monetary integration.

That approach can reduce dollar usage at the margins.

It does not create another dollar.

Expansion Has Increased Weight — and Increased Friction

BRICS expansion is often presented as evidence of growing power.

Numerically, that is true.

Strategically, expansion also creates another problem: more members means more competing national interests.

China wants greater international influence for the renminbi and Chinese financial infrastructure.

India wants strategic independence and remains cautious about systems that could increase Chinese dominance.

Russia has strong incentives to bypass Western financial channels because of sanctions.

Iran has similar motivations.

The Gulf states maintain substantial commercial and financial relationships with Western economies.

Brazil’s direction depends significantly on its domestic political leadership.

These countries do not enter BRICS with identical objectives.

That became visible again at the 2026 New Delhi summit. Reuters reported that India rejected China’s proposed mBridge payment platform, highlighting concern about Beijing’s influence over the bloc’s emerging financial architecture. Reuters

That disagreement tells us more about BRICS than many political declarations.

A coalition may share dissatisfaction with aspects of the existing system without agreeing on what should replace it.

The Dollar Has Something BRICS Cannot Manufacture Quickly

The dollar’s strength does not come merely from American political influence.

It comes from infrastructure.

Global investors can access extremely deep U.S. capital markets.

Treasury securities provide enormous liquidity.

Contracts are supported by a mature legal framework.

Dollar financing is embedded throughout international banking.

American markets allow capital to move at a scale that alternative systems have not replicated.

Those characteristics are closely connected to principles of private property, open capital markets, contractual enforcement, and relatively transparent financial institutions.

This is where political narratives about monetary competition often underestimate the importance of market structure.

A government can announce a payment system.

It cannot instantly manufacture trust, liquidity, legal predictability, or decades of accumulated market infrastructure.

From a classical-capitalist perspective, that distinction is fundamental.

Capital ultimately seeks liquidity, property protection, predictable rules, and the ability to enter and exit markets efficiently.

Political alliances matter.

Markets matter more.

Brazil Could Become a Major Test of BRICS Cohesion

Brazil is particularly important because it was one of the original BRICS members and has historically given the bloc political legitimacy outside Asia.

The country’s current election illustrates how quickly national priorities can affect international alignment.

Flávio Bolsonaro led the first round of Brazil’s 2026 presidential election with approximately 47% of the vote, ahead of President Luiz Inácio Lula da Silva at approximately 45%. The runoff is scheduled for October 25. Reuters has described Bolsonaro as more closely aligned with Washington and more likely to pursue stronger economic ties with the United States. Reuters

A Bolsonaro administration would represent a materially different economic and geopolitical direction for Brazil.

A more market-oriented government seeking closer commercial alignment with the United States would have less incentive to treat BRICS primarily as a platform for weakening dollar-based financial relationships.

That would not necessarily mean Brazil abandoning BRICS.

It would mean Brazil approaching the bloc more transactionally and with greater emphasis on national economic interests.

The initial market reaction already provides a signal. Following Bolsonaro’s stronger-than-expected first-round performance, Brazil’s Bovespa surged 7.7% to a record high, the real strengthened, and Reuters reported increased investor expectations for pro-business reforms. Reuters

By contrast, continued government under Lula would likely preserve Brazil’s stronger commitment to multilateral institutions, BRICS cooperation, and policies emphasizing economic sovereignty and a reduced dependence on U.S.-centered financial structures. Reuters describes Lula’s approach as emphasizing sovereignty and multilateralism while maintaining a closer political relationship with BRICS. Reuters

Brazil therefore represents more than an election.

It represents a test of whether BRICS can maintain strategic cohesion when one of its largest economies moves toward a more market-oriented and U.S.-aligned framework.

Markets Are Already Revealing the Internal Contradictions

The larger question is not whether BRICS can hold meetings or issue joint statements.

It can.

The question is whether its members can subordinate national interests sufficiently to build durable financial institutions.

So far, the evidence is mixed.

BRICS finance ministers continue to support greater interoperability among payment systems and increased use of local currencies. Reuters

At the same time:

• India resists Chinese dominance of payment infrastructure.
• Russia and Iran prioritize sanctions resistance.
• Gulf states balance relationships between East and West.
• Brazil’s political direction remains contested.
• China naturally seeks a larger role for its own currency and financial architecture.

These are not minor disagreements.

They represent competing strategic objectives.

The More Likely Future: Fragmentation, Not Replacement

The global financial system may become more fragmented.

That is a reasonable expectation.

More bilateral trade may settle in local currencies.

China’s CIPS payment network may continue expanding.

Central banks may diversify reserve holdings.

Gold may become more important.

Regional payment networks may develop.

Reuters recently reported, for example, that Ecobank plans to join China’s CIPS network for direct yuan settlement as Chinese-African trade expands. Reuters

These developments matter.

But a more fragmented system is not the same as a new unified system.

BRICS may contribute to a world with more financial options without creating a single credible monetary alternative to the dollar.

That distinction is crucial.

De-Dollarization Also Depends on the United States

A serious analysis must also acknowledge another reality.

The United States can weaken its own monetary advantage.

Excessive public debt, persistent fiscal deficits, unpredictable trade policy, institutional erosion, or excessive use of financial sanctions could encourage other countries to diversify more aggressively.

Morgan Stanley recently argued that U.S. policy choices will be critical in determining how far de-dollarization ultimately progresses, while also noting that there is currently no obvious replacement for the dollar. Reuters

That is consistent with a free-market perspective.

Dollar dominance should not be treated as an entitlement.

It must be supported by fiscal credibility, institutional confidence, property rights, open markets, and disciplined economic policy.

The strongest defense of the dollar is not political pressure.

It is maintaining the economic system that makes global capital want to hold dollars in the first place.

Conclusion: Influence Without Monetary Unity

BRICS should neither be dismissed nor romanticized.

Its economic weight is significant.

Its effort to create alternative payment channels is real.

Its members will continue searching for ways to reduce financial dependence on the United States.

But none of those facts establish that BRICS has created a credible replacement for the dollar.

It has not.

The bloc’s expansion has increased its visibility while simultaneously exposing deeper disagreements over China, monetary leadership, trade, payment systems, and geopolitical alignment.

The dollar faces gradual diversification.

BRICS faces a more difficult challenge: transforming political cooperation into monetary trust.

Those are not equivalent problems.

For investors and business owners, the relevant issue is therefore not whether BRICS will suddenly replace the dollar.

It is whether global finance is becoming more fragmented — and how that fragmentation affects capital, trade, currencies, and investment decisions.

BRICS has influence. The dollar still has infrastructure, liquidity, and trust.

Until that gap materially closes, the narrative of an imminent monetary replacement remains far ahead of the evidence.

For additional perspectives on global markets, capital, economics, and strategic decision-making, explore The Journal.

This article is provided for educational and strategic purposes. It does not constitute investment, financial, tax, legal, political, or currency advice.