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?

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Reese Marlowe in Business & Economy November 2026 • 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.

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Current Impact

BRICS has become an important subject in discussions about the future of global economic governance. Its potential effect on the dollar would depend on the extent to which members coordinate trade, finance, and monetary policy. At present, the long-term impact of any BRICS currency initiative remains uncertain.

Coordination Without a Treaty

BRICS brings together eleven major emerging markets and developing countries: Brazil, China, Egypt, Ethiopia, India, Indonesia, Iran, Russia, Saudi Arabia, South Africa, and the United Arab Emirates. The group serves as a platform for consultation and cooperation on contemporary regional and global political and economic governance issues. However, BRICS is described as an informal intergovernmental coordination forum rather than a treaty-based international organization, with no constitutive treaty, permanent secretariat, or independent budget.

An Evolving Group

BRICS has developed over time as countries have sought greater cooperation among emerging markets and developing economies. Its evolution reflects broader debates about representation in global political and economic governance. The group’s institutional and monetary ambitions remain part of an ongoing process rather than a completed historical settlement.

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.
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Current Debate

Recent discussion of BRICS focuses on whether cooperation among emerging economies could reshape established patterns of international finance. Analysts commonly examine the practical requirements for monetary coordination, including institutional arrangements and member-country alignment. Because these developments remain unsettled, claims about a near-term replacement for the dollar should be treated cautiously.

Institutional Uncertainty

Britannica describes BRICS as an informal grouping that developed into an intergovernmental organization consisting of 10 members. This characterization highlights the uncertainty surrounding the group’s institutional form and membership. Such institutional ambiguity can complicate efforts to create and sustain a common currency or other unified monetary framework.

Dollar Versus Alternatives

Comparisons between the dollar and a prospective BRICS currency must distinguish between an established international currency and a proposed alternative. The dollar benefits from existing international use, while a BRICS currency would require substantial coordination among participating economies. On the available evidence, its ability to challenge the dollar cannot yet be determined.

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.

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A Qualified Assessment

BRICS represents a meaningful forum for cooperation among emerging and developing economies, but cooperation alone does not establish a shared currency. The group’s informal structure leaves important questions about governance, financing, and implementation unresolved. Any conclusion that it will soon dethrone the dollar therefore remains speculative.

Potential Next Steps

The future of BRICS monetary cooperation will depend on whether members can translate consultation into durable institutions and coordinated economic action. Possible progress would require clarity about participation, governance, and the practical operation of any proposed currency. Until those questions are answered, the outlook should be framed as a possibility rather than a forecast.

Structural Constraints

BRICS operates within a global system shaped by different national interests, economic conditions, and existing institutions. Its role as a consultation and cooperation platform creates opportunities for coordination but does not remove the challenges of collective decision-making. These systemic constraints are central to assessing whether the group can support a credible alternative to the dollar.

People and Economies

Changes in international monetary arrangements could affect trade, prices, investment, and financial access for people and businesses. The consequences would depend on how any BRICS initiative is designed and implemented across participating economies. Because no settled alternative currency framework is established in the supplied material, its real-world effects remain uncertain.

How the BRICS model compares with currency evidence

The paper models countries’ preferred trade currency, whereas reserve and invoicing studies measure existing currency use; those outcomes are not directly interchangeable.[1] [2] [3]

A simulated currency-preference contest on the world trade network

Study designSimulation or modelling study[1]
PopulationWorld trade network associated to 194 UN countries[1]
Sample size194 UN countries[1]
SettingWorld trade network, using the United Nations Comtrade database[1]
Duration2010–2020[1]
ComparisonThe US dollar and the euro[1]
Main outcomeCountries’ preferred trade currency[1]
Effect size58% preferred the BRICS currency, 23% the euro, and 19% the US dollar[1]
Times cited19[1]

What a network simulation can establish

Simulation or modelling study (level 7 of 8)

This is a simulation using Monte Carlo modeling of Ising-type interactions, not an observation of countries adopting a new currency; it estimates preferences within the model.[1]

The model is applied to a trade network covering 194 UN countries, so its scope is broad, but its output remains conditional on the modeled network and rules.[1]

The model's preference split and its baseline

  • 58%, 23%, 19%In the model’s 2012 result, 58% of countries preferred the hypothetical BRICS currency, compared with 23% for the euro and 19% for the US dollar; these are modeled preferences, not observed transaction shares.[1]

What would test the model outside its assumptions

  • Would the preference pattern persist if political constraints and member-country differences were represented explicitly?[1] [4] [5]
  • How would actual invoicing choices respond to network advantages and the persistence of incumbent currency use?[2] [6]

Sources

  1. Prospects of BRICS currency dominance in international trade (Springer Science and Business Media LLC, 2023)
  2. The Fed - "The International Role of the U.S. Dollar" Post-COVID EditionLock (www.federalreserve.gov)
  3. Global trade invoicing patterns: new insights and the influence of geopolitics (www.ecb.europa.eu)
  4. The role of BRICS in challenging dollar dominance: Prospects of a common currency (2026)
  5. Can BRICS De-dollarize the Global Financial System? Logo for Cambridge Core from Cambridge University Press. Click to return to homepage. Logo for Cambridge Core from Cambridge University Press. Click (www.cambridge.org)
  6. How is a leading international currency replaced by another? Old versus new evidence (www.ecb.europa.eu)

About this Article -

Written with AI assistance from published research, and reviewed by the Mystum team. 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

1

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.

2

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.

3

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.

4

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.

5

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.

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