As Brazil assumes the presidency of BRICS in 2025, the country has made it clear that the bloc will not move forward with a common currency this year, despite past discussions, reported The Hindu.
However, its agenda may set the stage for reducing reliance on the US dollar in global trade, a move that has already drawn strong warnings from United States (US) President Donald Trump.
Trump Threatens Tariffs on BRICS Nations
Trump has repeatedly criticised BRICS for considering alternatives to the dollar, warning that any effort to challenge the “mighty US dollar” would have consequences.
“There is no chance that BRICS will replace the U.S. dollar in international trade, or anywhere else, and any country that tries should say hello to tariffs, and goodbye to America!” Trump posted on social media last month.
On Thursday, he reiterated the threat of imposing 100 per cent tariffs on BRICS nations if they attempted to reduce their dependence on the dollar.
When asked about BRICS, Trump dismissed the group, stating, “I don’t care, but BRICS was put there for a bad purpose and most of those people don’t want it. They don’t even want to talk about it now. They’re afraid to talk about it because I told them if they want to play games with the dollar, then they’re going to be hit with a 100 per cent tariff. The day they mention that they want to do it, they will come back and say, ‘We beg you not to do this’. BRICS is dead since I mentioned that..” The Hindu reported.
Brazil’s Shift in BRICS Strategy
Despite past statements by Brazilian President Luiz Inácio Lula da Silva, who had floated the idea of a BRICS currency, Brazilian officials confirmed that such a proposal has never entered technical discussions.
Instead, Brazil is focusing on reforms within BRICS to facilitate trade in local currencies, potentially reducing dependence on the US dollar without directly opposing it.
Officials emphasised that the initiative is not meant to be confrontational but aims to lower transaction costs and improve trade efficiency among BRICS nations.
One official clarified: “It’s not directed against anyone.” The focus is on reducing friction for global trade.
Technological Innovations and Payment Reforms
Brazil’s agenda includes, (i) Exploring blockchain technologies to enhance cross-border payments, (ii) Linking payment systems to lower transaction costs, (iii) Following multilateral financial standards set by organisations such as the Bank for International Settlements (BIS).
Despite these discussions, BRICS members do not intend to eliminate their dollar reserves, and Lula himself has softened his stance on a new BRICS currency. However, he continues to support developing alternative trade mechanisms to lessen full dependency on the US dollar.
Upcoming BRICS Meetings
Brazil’s finance ministry and central bank recently met to discuss their BRICS presidency agenda, which includes cross-border payment initiatives. Representatives from BRICS nations will meet in South Africa this month on the sidelines of the G20 meetings, where Brazil will present its plan for the BRICS Summit in July.
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