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BRICS nations aim to challenge the U.S. dollar's dominance with a new digital currency and alternative payment systems, though internal disagreements and global dependencies pose significant hurdles.

Talk of the BRICS 'Unit' and de-dollarization grabs headlines, but dismantling seven decades of dollar dominance is a far greater challenge than making bold statements.

The dominance of the U.S. dollar is encountering new challenges. BRICS nations have announced plans for a new currency, alternatives to SWIFT, and a coordinated effort to reduce U.S. dollar influence. In the previous year, the dollar’s value declined by 10 percent, while gold prices exceeded $6,000 per ounce. Although these figures appear significant, the central question persists: can BRICS nations genuinely undermine the dollar’s dominance?

Previous attempts to challenge the existing system, such as those involving the Soviet Union’s ruble, the Euro, Japan’s yen, and China’s yuan, have not succeeded due to political, economic, and military factors, as well as insufficient trust in between them. The strength of the dollar extends beyond monetary considerations; it is embedded in a seventy-year-old system that permeates global institutions, trade networks, and prevailing mindsets.

How Deep is the Dollar’s Dominance

Dollar power is often measured in statistics—90% of global transactions use the dollar, and 56% of central bank reserves are held in dollars. But the true strength lies in the post-World War II system the U.S. constructed: the IMF and World Bank shape global economic policy, SWIFT manages international payments, and American rating agencies determine creditworthiness worldwide.

This dominance works quietly and shapes the rules so that everyone has to follow America’s lead. To trade internationally, you need dollars. To attract foreign investment, you need approval from American institutions. If America is unhappy, it can remove you from the system, as it did with Russia, Iran, and North Korea.

The most significant achievement of this system is that, over seventy years, there has developed a widespread belief in the necessity of a single dominant global currency, namely the dollar. This dependence is both financial and psychological.

BRICS’s Grand Plans

BRICS countries seek to alter this prevailing mindset. In October 2025, they introduced a new digital currency, the ‘Unit,’ which is backed by gold. Additionally, eleven countries established a new payment system intended to replace SWIFT. Russia and China have announced that 90% of their bilateral trade will be conducted using their respective national currencies. China now conducts one-third of its foreign trade in yuan, an increase from 20% in 2022.

In the previous year, the dollar’s share in trade among BRICS countries declined from 65% to 35%. Russia and China conducted 90% of their $244 billion trade in rubles and yuan. The increase in gold prices above $6,000 per ounce indicates that investors are diversifying away from the dollar. For the first time in decades, the dollar’s monopoly appears to be weakening.

While public announcements are straightforward, implementation is considerably more challenging. BRICS countries face significant internal disagreements. China and India perceive each other as rivals, and India is concerned that a new BRICS currency would be dominated by China, given that China’s economy constitutes over 70% of BRICS’s total. India does not support the yuan replacing the dollar as the dominant currency. Russia’s economy has been weakened by conflict and Western sanctions, while Brazil and South Africa possess comparatively smaller economies.

BRICS countries agree that they do not want American dominance, but they do not agree on what they want instead. Building a strong alternative on such shaky ground will not be easy.

BRICS Strengthened by America’s Offensive Actions

America’s own actions have made BRICS stronger. When Washington used economic sanctions, removed Russia from SWIFT, and threatened countries trading with Iran, it showed the world that depending on the American financial system can be risky. As Russian President Putin said, “We are not fighting against the dollar. But if they don’t let us use it, we will find other ways.”

President Trump’s recent threat is another example. He said that if any BRICS country stops using the dollar, they will face a 100% tariff. This approach could backfire. In the short term, smaller countries may be scared, but in the long run, it could push them to look for other options.

India’s Balance 

India’s position is the most complicated. New Delhi is a founding member of BRICS and will host the BRICS summit in 2026. Foreign Minister Dr S. Jaishankar announced the summit’s theme: ‘BRICS and Global South: Building a Better World Together.’ At the same time, Jaishankar says India does not want to replace the dollar and “we believe in a multipolar world, but we don’t want currency chaos.” This is not a contradiction; it is a careful strategy.

India understands that the world is shifting from unipolarity to multipolarity. It wants to play a role in shaping this new order, which is why it’s active in BRICS. But India also knows that it has deep economic ties with America and needs American support to manage China. Therefore, India is playing both sides — supporting BRICS enough to maintain its influence, but not so much that it angers Washington.

It is still unclear if this balance will succeed. In the 1950s and 60s, Nehru tried to balance America and the Soviet Union through the Non-Aligned Movement. This approach worked to some extent. However, when China attacked in 1962, neither America nor the Soviet Union helped, and India was left alone.

Today’s situation is even more complicated. If BRICS fails, India will have wasted its diplomatic efforts. If BRICS succeeds but India is not fully involved, China will benefit the most. The biggest risk is that if Washington thinks India is too close to BRICS, then the Quad and other partnerships could weaken. India is in a very tricky position.

Breaking Dominance Isn’t Easy

The central question is whether BRICS can disrupt the dollar’s dominance. The most realistic assessment suggests this is unlikely in the near term. The dollar’s dominance is rooted in decades of history, with seventy years of trade agreements and financial instruments based on the dollar. Altering this system would be comparable to uprooting a tree with exceptionally deep roots.

Launching a new payment system is one thing; building one as reliable and efficient as the dollar-based SWIFT network is another matter entirely. While SWIFT benefits from decades of refinement, BRICS nations must now prove they can replicate—and sustain—such robustness.

The dollar will not lose its place overnight. What will change, slowly, is its monopoly. In the future, the yuan, euro, and maybe the BRICS ‘Unit’ will be used alongside the dollar. But this shift will take many years.

America will strongly resist this change. Internal disagreements among BRICS countries will slow things down. Russia’s weak economy, China’s wish to lead, India’s careful approach, and the limited power of Brazil and South Africa will all create obstacles.

Still, with so many countries agreeing that relying on one country’s currency is risky, there is no going back. The question is not if the dollar will be challenged—it already is. The real question is whether this challenge will lead to real change or just more instability. History shows that big changes are slow and difficult. BRICS will likely learn this as well.

(Author: Raju Verma, Final year PhD scholar in International Politics at Jawaharlal Nehru University and teaches Political Science at Delhi University)