BRICS builds around the dollar

Keypoints:

BRICS is building around, not replacing, the dollar
Payments can diversify faster than global reserves
Africa must avoid swapping one dependency for another

BRICS is not about to replace the US dollar. It probably does not need to.

The more consequential challenge emerging from the bloc is quieter and more practical: building enough financial infrastructure around the dollar system so countries no longer have to rely on it for every trade payment, development loan or cross-border transaction.

That is very different from creating a rival reserve currency.

For Africa, it raises a more important question than whether the dollar’s reign is ending. Could a more fragmented global financial system give African countries greater room to manoeuvre — or simply leave them more exposed to China?

The dollar can dominate and still lose ground

The scale of dollar dominance remains formidable.

According to IMF data, the dollar accounted for 57.13 percent of disclosed global foreign-exchange reserves in the first quarter of 2026. The Chinese renminbi accounted for just 1.99 percent.

That gap alone should temper claims that a BRICS currency — or even the renminbi — is close to displacing the dollar.

The dollar’s strength rests on far more than America’s share of global trade. It is deeply embedded in international borrowing, commodity pricing, bank funding and central-bank reserves. US financial markets offer a depth and liquidity that no BRICS member currently matches.

There is also the simple advantage of familiarity. Banks, governments and investors use dollars partly because everybody else already does.

That network cannot be dismantled by political declaration.

But it does not have to remain untouched.

A currency can continue to dominate global reserves while becoming less necessary in individual transactions. That is where the BRICS challenge starts to look more credible.

New Delhi showed where BRICS is heading

The September 2026 New Delhi Declaration offered a clearer indication of how BRICS intends to proceed.

There was no announcement of a common currency.

Instead, leaders backed further work on interoperability between national payment and messaging systems and continued discussions over settling more trade and investment in members’ own currencies.

The declaration’s acknowledgement that there is ‘no one-size-fits-all approach’ is telling.

BRICS contains economies with very different monetary systems, political priorities and relationships with global capital. China maintains capital controls. India has been cautious about presenting financial diversification as an ideological attack on the dollar. Brazil supports greater monetary flexibility but has no reason to surrender control of the real – the Brazilian currency.

That makes a euro-style monetary union exceedingly unlikely.

What is emerging instead is something less dramatic but potentially more useful: a network of financial arrangements allowing countries to bypass the dollar where doing so makes commercial sense.

The real test is payments, not reserves

This distinction matters.

De-dollarisation is often discussed as though countries must either use the dollar or abandon it. International finance does not work that way.

Change can happen in layers.

A Brazilian company may pay an Indian supplier directly in reais and rupees while Brazil’s central bank continues to hold substantial dollar reserves.

An African government may borrow from the New Development Bank in a local currency while continuing to issue dollar-denominated Eurobonds.

A Chinese exporter may accept renminbi while its bank still prizes access to dollar liquidity during periods of global stress.

None of those transactions dethrones the dollar.

But each reduces the number of occasions when the dollar has to sit in the middle.

That is the more credible BRICS strategy.

The bloc does not have to replace the dollar to make it less indispensable.

A parallel layer, not a rival empire

Seen this way, BRICS is not necessarily trying to construct a complete alternative to Western finance.

It is trying to build another layer alongside it.

That layer could include local-currency settlement, interconnected payment systems, central-bank digital currency links and development lending that does not automatically expose borrowers to the dollar.

If those systems become cheaper, reliable and easy to use, companies will adopt them for practical reasons.

That is important because durable financial change rarely happens simply because governments demand it.

Businesses adopt payment systems when they save money. Banks use settlement networks when they trust them. Borrowers seek different currencies when doing so lowers risk.

The success of BRICS will therefore depend less on anti-dollar rhetoric and more on whether its alternatives actually work.

Lending could matter more than symbolism

The New Development Bank may ultimately matter more to Africa than any theoretical BRICS currency.

Its 2022–2026 strategy targeted 30 percent of financing in member-country national currencies. For its next strategic period, the bank’s leadership has proposed raising the share of local-currency financing towards 40–50 percent.

That may sound technical, but it goes to the heart of one of Africa’s recurring financial vulnerabilities.

Governments often borrow in dollars to finance projects that earn revenue in local currencies.

When those currencies weaken, the underlying project may not have become less productive, but its debt suddenly becomes much more expensive to service.

A power plant collecting tariffs in rand, cedis or birr can come under severe pressure if its repayments remain fixed in dollars.

That currency mismatch has repeatedly magnified Africa’s debt burdens.

If BRICS institutions can finance more projects in currencies better matched to their revenues, the impact could be far more significant than simply changing the currency used to pay for imported goods.

It would also broaden the choices available to governments already contending with the high borrowing costs examined in Africa Briefing’s analysis of Africa’s debt ‘risk tax’.

China is the unavoidable question

There is, however, no serious discussion of a BRICS financial alternative without confronting China.

China’s economy dwarfs those of the bloc’s other members. Its trade relationships stretch across Africa, Asia and Latin America, while its banks have the scale to support renminbi settlement far beyond China’s borders.

That means a shift away from dollar intermediation could disproportionately strengthen the renminbi.

The signs are already visible.

Renminbi-clearing arrangements are expanding across Africa, making it easier for some companies trading with China to avoid converting first into dollars.

Zambia has gone a step further, allowing certain mining tax payments to be made in renminbi.

These moves can make economic sense.

If a mining company earns renminbi from Chinese buyers, purchases Chinese equipment and makes payments linked to Chinese financing, routing every transaction through dollars adds cost for little benefit.

But there is a strategic risk.

Africa could reduce its exposure to the dollar only to become more exposed to a currency whose convertibility and financial system remain heavily influenced by Beijing.

That would be diversification in appearance rather than substance.

Africa’s strength lies in refusing exclusivity

This is why Africa’s response should not be built around choosing sides.

The dollar will remain indispensable in many areas of international finance. China will remain central to African trade. Europe will continue to be an important market and source of capital. India and the Gulf states are expanding their economic presence across the continent.

Africa’s strongest position is therefore not alignment with one monetary camp.

It is the ability to use several.

That means preserving access to dollar markets while expanding settlement options with China, India and other trading partners. It also means strengthening African payment infrastructure while ensuring it can eventually connect with several external systems.

Africa’s Pan-African Payment and Settlement System matters in that context, not because it represents an African rebellion against the dollar, but because it gives the continent another route.

The aim should be to build more routes, not close existing ones.

The biggest change may be bargaining power

That is where the BRICS experiment could become genuinely important for Africa.

Financial dependence affects political bargaining power.

A government with one source of infrastructure finance has fewer choices than one with five. An importer that can obtain only dollars is more vulnerable to dollar shortages than one able to settle directly with several major trading partners.

A central bank dependent on a narrow range of assets has less flexibility than one operating in a deeper and more diversified financial environment.

None of this requires the disappearance of the dollar.

It requires alternatives that are credible enough to use.

And that may ultimately be the more profound challenge to the existing system.

The dollar’s power has never rested solely on compelling countries to use it. It also rests on the fact that, in many parts of global finance, there is still no alternative that is as liquid, convenient and widely accepted.

BRICS is now testing whether that gap can be narrowed.

Washington should watch the margins

The danger for the United States is not that central banks suddenly empty their dollar reserves and replace them with a BRICS currency.

That scenario remains remote.

The more plausible shift is incremental.

More China-Africa trade moves into renminbi. More India-Brazil commerce settles in national currencies. A larger share of development lending is issued outside the dollar. National payment networks become easier to connect. Central banks diversify reserves at the margins.

No individual move looks revolutionary.

Taken together, however, they could gradually produce a global financial system in which the dollar remains number one but enjoys less exclusivity than it does today.

That is a subtler challenge than the creation of a rival currency, but potentially a more durable one.

Africa should use the competition

For Africa, the emerging contest should not become a question of loyalty.

It should become leverage.

If BRICS institutions offer cheaper financing on sound terms, African governments should use it.

If dollar markets remain deeper and more attractive, they should use those too.

If renminbi settlement cuts costs for trade with China, companies should be free to adopt it without turning the decision into a geopolitical statement.

And where African financial infrastructure can reduce unnecessary dependence on offshore currencies altogether, that capacity should be strengthened on its own merits.

The test is not whether Africa participates in de-dollarisation.

It is whether Africa becomes less vulnerable.

That means reducing currency mismatches, widening access to capital and avoiding excessive dependence on any single financial centre.

BRICS cannot yet offer a genuine replacement for the dollar.

But it may be able to offer something more achievable: enough competition around the edges of the dollar system to give countries that once had few alternatives a greater range of choices.

For Africa, that may be the opportunity that matters most.