BRICS Fails to Challenge Dollar Dominance, Focuses on Interoperable Payments

The BRICS nations have taken a cautious approach to challenging the dominance of the US dollar at their recent meeting, instead focusing on developing interoperable payment systems and local-currency settlement.

A joint statement from the finance ministers and central bank governors made no mention of a common BRICS currency or a call for replacing the US dollar. Instead, they emphasized the need for 'pragmatic solutions' to facilitate cross-border payments among member countries.

Russian President Vladimir Putin and Iranian President Masoud Pezeshkian both spoke at the BRICS Business Forum in New Delhi, where they highlighted the need for greater use of national currencies in trade. Pezeshkian went further, arguing that the international financial system's concentration around a limited number of currencies leaves economies vulnerable to political shocks.

The Iranian President said that expanding the use of national currencies would help reduce dependence on the dollar-based system and allow member countries to conduct economic interactions with less reliance on US currency. He also pointed to the New Development Bank (NDB) as an institution that could facilitate transactions among members without relying on the US currency.