Symbolic image of the US dollar breaking in front of the BRICS flag, representing a shift in financial power.

BRICS Currency: Will It Dethrone the Dollar's Reign?

Reese Marlowe in Business & Economy August 2025 • 4 min read.

"New research analyzes the potential for a BRICS-backed currency to dominate international trade, challenging the US dollar and Euro."

For decades, the U.S. dollar has been the undisputed king of international trade. But winds of change are blowing. With nations like Brazil and China exploring trade in their own currencies, the dollar's dominance is being challenged like never before. A key question arises: could a new power player emerge to reshape the landscape of global finance?

Enter the BRICS nations – Brazil, Russia, India, China, and South Africa. These emerging economies are discussing the creation of a shared trade currency. During a state visit to China in April 2023, Brazilian President Lula proposed the idea of a BRICS-backed currency, igniting both excitement and skepticism. The goal? To reduce reliance on the dollar and foster greater economic independence.

Now, a new study is analyzing the potential impact of a BRICS currency (hereafter called BRI) on international trade. By examining global trade patterns and currency preferences, researchers are modelling how such a currency might gain traction and potentially challenge the established order. The results offer a fascinating glimpse into a possible future of global finance.

Modelling a Multi-Currency World: How the Research Works

Symbolic image of the US dollar breaking in front of the BRICS flag, representing a shift in financial power.

The study, recently made public in April 2023, uses data from the United Nations Comtrade database, which tracks trade between 194 countries. The data covers the years 2010-2020, providing a detailed view of global trade flows. Based on the money flows in the database the World Trade Network (WTN) is created.

Researchers created a mathematical model to simulate competition between three currencies: the US dollar, the Euro, and a hypothetical BRICS currency. This model assigns each country a 'trade currency preference' (TCP), indicating which currency it would prefer to use for international transactions. This preference is determined by:

Trade Flows: The volume of trade between countries.
Global Weight: A country's overall importance in international trade.

The model also establishes three 'currency seed groups': the Eurozone (9 countries), Anglo-Saxon nations (5 countries), and the BRICS countries. Countries within these groups are set to always trade in their respective currencies, providing a foundation for the model.

A New World Order?

This study suggests that a BRICS currency could indeed gain significant traction in international trade, potentially reshaping the global financial landscape. While the dominance of the US dollar has been a long-standing reality, the rise of emerging economies and the desire for greater economic independence could pave the way for a more multi-polar currency system. Whether the BRICS currency can overcome the political and economic hurdles remains to be seen, but the analysis offers a compelling case for its potential impact.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: 10.1007/s41109-023-00590-3,

Title: Prospects Of Brics Currency Dominance In International Trade

Subject: q-fin.tr cond-mat.stat-mech cs.si physics.soc-ph

Authors: Célestin Coquidé, José Lages, Dima L. Shepelyansky

Published: 30-04-2023

Everything You Need To Know

What is the core purpose behind the proposal for a BRICS-backed currency?

The primary goal behind the creation of a BRICS-backed currency, referred to as BRI, is to decrease the reliance on the U.S. dollar and foster greater economic independence among the BRICS nations: Brazil, Russia, India, China, and South Africa. This initiative aims to reduce the dominance of the U.S. dollar in international trade and create a more multi-polar currency system, allowing these emerging economies to conduct trade in their own currencies and lessening their vulnerability to fluctuations in the dollar's value.

How does the study analyze the potential impact of a BRICS currency on international trade?

The study, based on data from the United Nations Comtrade database from 2010-2020, uses a mathematical model to simulate currency competition. It examines global trade patterns and currency preferences. The model includes three currencies: the U.S. dollar, the Euro, and the hypothetical BRICS currency (BRI). The model assigns each country a 'trade currency preference' (TCP), determined by trade flows between countries and each country's global weight in international trade. It also establishes 'currency seed groups' such as the Eurozone, Anglo-Saxon nations, and the BRICS countries to provide a foundational framework.

What are 'trade currency preferences' (TCP) and how are they determined in the study?

In the study, 'trade currency preference' (TCP) indicates a country's preferred currency for international transactions. The TCP is determined by two main factors: the volume of trade flows between countries and a country's global weight, which reflects its overall importance in international trade. The model uses these factors to simulate how different countries might choose to use the U.S. dollar, the Euro, or the BRICS currency (BRI) for their trade activities.

What are the potential implications if the BRICS currency gains significant traction in international trade?

If the BRICS currency (BRI) gains significant traction, it could reshape the global financial landscape. The U.S. dollar's dominance in international trade could be challenged, leading to a more multi-polar currency system. This shift could provide greater economic independence for the BRICS nations and other countries that adopt the BRI, reducing their vulnerability to fluctuations in the U.S. dollar. However, the success of BRI depends on overcoming political and economic hurdles.

What are 'currency seed groups' in the context of the study, and why are they important?

In the study, 'currency seed groups' are pre-defined groups of countries that always trade in their respective currencies, providing a foundation for the model. These groups include the Eurozone (9 countries), Anglo-Saxon nations (5 countries), and the BRICS countries (Brazil, Russia, India, China, and South Africa). The concept of the currency seed group is very important because it ensures the countries belonging to them trade within those currencies, providing some realism, and also baseline behavior, in the complex modeling of multiple currencies competition.