Why De-Dollarization Is More Talk Than Action

BRICS Push Local Currencies

When BRICS leaders met over the weekend, discussions focused on the economic power of the Global South and the need to expand trade in local currencies, signaling a push to cut dependence on the greenback. The bloc aims to reduce its reliance on the U.S. currency due to geopolitical tensions, economic sanctions, and U.S. tariff policy, experts said. However, analysts have raised doubts about the ability of the BRICS nations to successfully wean themselves away from the dollar, a dynamic further analyzed in Why de-dollarization discussions remain more talk than action for global trade.

Global Dominance of the Dollar

For years, the term de-dollarization has surfaced whenever confidence in the U.S. economy is shaken. The idea centers on the fact that countries mostly transact in the U.S. dollar, underpinning the majority of the world financial system. Two of the most traded commodities globally, oil and gold, remain denominated in the greenback. Data from the Bank of International Settlements cited by CNBC on Tuesday, Sept. 15, 2026, shows that the U.S. dollar made up 89% of the forex market as of April, up 1 percentage point from a year earlier, while the euro and the yen accounted for 29% and 17%, respectively.

Member Priorities and Hurdles

South African President Cyril Ramaphosa said in his address at the BRICS Summit that the bloc should press ahead with greater use of local currencies, stronger cross-border payment systems, and deeper financial interconnectivity. Energy-rich economies such as Iran and Russia, whose ability to trade in dollars has been hampered by U.S. sanctions, also urged the group to develop payment, settlement, and depository infrastructure within BRICS. Iranian President Masoud Pezeshkian stated that the current financial system is vulnerable to political shocks due to its concentration on a limited number of currencies, pointing to the need for diversification.

Structural Deficits and Tariffs

Yet a lack of financial and macroeconomic integration, wide trade imbalances, and deep distrust between key member states remain the biggest hurdles the bloc must cross. The BRICS lack the unified institutional, financial, and macroeconomic infrastructure needed to substitute the inherent liquidity and trust of the dollar globally, Jayant Krishna, senior fellow at the Center for Strategic and International Studies, told CNBC. U.S. President Donald Trump has previously threatened the bloc with tariffs if they moved away from the dollar, writing that Washington requires a commitment that members will neither create a new currency nor back any other currency to replace the U.S. dollar or face 100% tariffs.

Trade Realities Within the Bloc

Collectively, 10 BRICS member countries accounted for 27% of world output, 24% of merchandise exports, and 22% of foreign direct investment inflows in 2024, according to a United Nations Trade and Development report published in March. While that report noted fresh opportunities for cooperation, it underscored that intra-BRICS trade only accounted for about 5% of world trade as of 2024. The BRICS 2026 declaration made no mention of a common currency or firmer details on trade settlements, asking the BRICS Payment Task Force instead to work on practical solutions for cross-border payments, aligning with the broader commercial themes tracked via Why de-dollarization discussions remain more talk than action in global trade.

Bilateral Shifts and Rivalries

Bilateral shifts remain driven by necessity rather than coordinated policy. Reema Bhattacharya, head of Asia research at Verisk Maplecroft, told CNBC that Russia and China now settle close to ninety percent of their trade in rubles and yuan, an acceleration pushed by post-2022 sanctions. Most BRICS currencies lack deep liquid markets outside their home economies, discouraging exporters from accepting them and keeping dollar invoicing the path of least resistance. Furthermore, competing interests create friction. Bhattacharya noted that the India-China rivalry serves as the single biggest brake on cohesion, as both nations compete in manufacturing, technology, investment, and regional influence.

Economic Ties and Competing Agendas

Economic ties and deficits complicate matters further. China is one of India's largest business partners, with total trade reaching a record $151.1 billion in the year ending March 2026. New Delhi's deficit with Beijing rose to a record $112.16 billion, up from $99.21 billion. Meanwhile, India goods and services trade with the U.S. was around $239 billion in 2025, featuring a goods trade surplus of $58.4 billion and a services trade surplus of $4.7 billion. Because India runs a large trade deficit with China, a shift away from the dollar does not work in its favor. Krishna Bhimavarapu, APAC economist at State Street Investment Management, told CNBC that members have vastly different priorities, noting that Russia and Iran want to reduce sanctions exposure, China wants international use of the renminbi while maintaining capital controls, and India supports greater use of the rupee.