Not long ago, BRICS—the bloc consisting of Brazil, Russia, India, China, and South Africa—was heralded as the harbinger of a new global financial era, one that would challenge the dominance of the US dollar and reshape international economic power. The narrative was clear: BRICS would spearhead “de-dollarization,” creating alternative payment systems, launching a shared currency, and breaking free from American financial hegemony. Yet today, those ambitions seem muted, sidelined, or fractured. What happened? An in-depth look reveals how the resurgence of Donald Trump and his aggressive economic policies played a pivotal role in stalling BRICS’ ambitions and why the dream of a BRICS currency appears, for now, to be slipping away.
The BRICS High Tide: Expansion and Bold Promises
Around 2023, BRICS was riding a wave of optimism and expansion. The group doubled its membership, welcoming the UAE, Egypt, Ethiopia, and Iran into its fold, with Saudi Arabia also considering joining. This acquisition of new members added economic weight and geopolitical clout. Summits became a venue for bold statements—Putin flaunted defiance against the West, while Xi Jinping pledged a fresh era of international cooperation untethered from the dollar’s influence. Payment systems were underway, and trade in local currencies was on the rise. For the first time in decades, there appeared to be credible momentum toward a multipolar financial order that could unsettle Washington.
Trump’s Return: Tariff Threats and Economic Coercion
Then Donald Trump reclaimed the US presidency, resetting the narrative swiftly and decisively. Following his 2024 election win, Trump publicly demanded that BRICS countries pledge not to develop a new common currency or back alternatives to the US dollar. Failure to comply would trigger punitive tariffs reaching up to 100%. In July, he intensified threats by adding an extra 10% tariff against any nation aligning with “anti-American” BRICS policies.
This hardline approach recognized the dollar’s central role not just in trade but as the linchpin of US global power. Trump framed losing the dollar’s reserve currency status as tantamount to losing a major war—economic warfare was deployed unapologetically to maintain dollar hegemony. Unsurprisingly, BRICS leaders went quiet. The Rio summit in July 2024 symbolized the shift: Xi Jinping skipped a meeting he had never missed in over a decade, attending only via a proxy, while Putin appeared only virtually due to international legal pressures.
Internal Divisions and Diplomatic Fractures
BRICS’ internal challenges came into sharper relief. India seized the leadership role at Rio, dominating despite the group’s ethos of multipolarity. The historic rivalry between India and China simmered unresolved—border tensions from 2020 lingered beneath a diplomatic veneer. Russia’s economic vulnerability was plain, as it sold discounted oil to India paid in rupees—currencies not easily usable—and remained isolated by Western sanctions.
Some new members, like Iran and Saudi Arabia, revealed divergent priorities: Iran publicly broke ranks by rejecting parts of summit declarations, while Saudi Arabia maintained its currency peg to the dollar despite joining BRICS’ political conversation. Brazil, the host, attempted to balance growing Chinese investment with the need to access American markets and technology. These fissures complicated presenting a united front against dollar dominance.
The Quiet Build-Up: Incremental De-dollarization
Despite setbacks and showy diplomatic avoidance, what’s happening beneath the surface tells a more nuanced story. BRICS is steadily increasing trade settled in local currencies—up to 90% in intra-BRICS transactions in mid-2024, a dramatic jump from 65% two years prior. Initiatives like the M-Bridge platform, designed as a Central Bank Digital Currency (CBDC) infrastructure for cross-border payments, reached minimum viable product status in 2024. BRICS Pay, a potential alternative to Swift, promises high transaction speeds, although adoption and regulatory hurdles remain daunting.
Moreover, central banks in BRICS countries purchased record-breaking quantities of gold in 2024, while China reduced its holdings of US Treasury securities from over a trillion to around $700 billion. These moves reflect a cautious but strategic hedging against continued dollar vulnerability.
The Crypto Contradiction and Dollar’s Paradoxical Role
A paradox complicates this process: while BRICS pushes de-dollarization, the crypto market heavily depends on the US dollar through stablecoins—especially Tether (USDT), which dominates with over $130 billion in circulation, all pegged to the dollar. Every USDT transaction inadvertently reinforces the greenback’s dominance, a dynamic BRICS nations, especially Russia and Iran, are keenly aware of. Attempts to develop alternative stablecoins face fintech and adoption challenges, particularly when China’s digital yuan competes with dominant private platforms like Alipay and WeChat Pay.
The global crypto landscape within BRICS is fragmented: Russia vacillates between banning and embracing Bitcoin, China bans mining but still sees underground activity, the UAE aims to be a crypto hub while maintaining dollar links, and Iran uses crypto for sanction evasion amid public restrictions.
The Impact on Global Markets and the Dollar’s Waning Invincibility
Market reactions illustrate shifting dynamics. Traditionally, US Treasury bonds served as a safe haven during crises; however, in 2024, sales of Treasuries during market stress surged, and yields spiked following Trump’s tariff announcements, indicating diminished trust in the “safe” US debt even in turbulent times. This suggests that the dollar’s financial fortress, while far from toppled, faces increasing cracks.
Conclusion: A Slow, Fragmented Shift Rather than a Collapse
BRICS’ quest to dethrone the US dollar through a shared currency or comprehensive financial architecture has stumbled, heavily constrained by Trump-era tariff threats, internal divisions, and economic dependencies on the existing system. Yet the dollar’s hegemony is not as unassailable as before: incremental steps in local currency trade, gold purchases, alternative payment rails, and crypto experimentation are quietly eroding US dominance.
Trump’s hardline tactics have successfully frozen BRICS’ revolutionary ambitions temporarily, forcing the bloc to retreat into defensive maneuvering. However, this aggressive stance may inadvertently hasten the search for alternatives, as countries seek to protect themselves from punitive economic measures. History shows that imperial powers and their currencies inevitably wane—the British pound, Spanish real, and Dutch guilder all had their day before being supplanted.
For the crypto world, this new global shifting landscape offers both opportunity and risk. Trust in fiat currencies is eroding, compelling some to turn to decentralized alternatives like Bitcoin, which benefit under sanction regimes and financial exclusion. Yet looming government pushback, intensified as crypto grows, may challenge this trend.
In sum, the collapse of a formal BRICS currency and the stalled de-dollarization are products of multifaceted geopolitical pressures—including the decisive role of Trump’s tariff policies—combined with inherent internal contradictions within BRICS itself. The dollar’s reign will not end overnight, but change is brewing, piece by piece, under the surface of global finance.
This article was inspired by a detailed analysis presented in a recent Coin Bureau video exploring the evolving dynamics of BRICS, de-dollarization, and global financial shifts in the era of Trump’s renewed America.
By Wolfy Wealth - Empowering crypto investors since 2016
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