BRICS Pay Fails to Dislodge Dollar as Middle Powers Hedge Their Bets

BRICS Pay is a system that links national payment rails to allow member states to settle trade without using dollar correspondent banks. The system has been operationalized by India and Indonesia, who have settled bilateral trade in rupees and rupiah without converting to dollars. Officials on both sides described this as part of 'a measured approach rather than an outright rejection of the dollar.'

The dollar's share of global central-bank reserves, tracked quarterly in the IMF's COFER data, stood at 57.13% in the first quarter of 2026 - down from a 71% peak in 2000 but still above 50%. This decline is slow and gradual, not collapsing.

Indonesia and Thailand are pursuing both BRICS and OECD memberships simultaneously, with Indonesia's foreign ministry describing its foreign policy as 'independent and active'. This suggests that they are hedging their bets rather than abandoning the dollar system.

The UAE has also run a rupee-dirham local currency settlement system with India since July 2023, but still keeps its own currency pegged to the US dollar at a fixed rate. A country cannot be described as fleeing the dollar system while it keeps its own currency's value legally defined in dollars.

Some analysts argue that reserve currencies have never lost their status overnight, and sterling's decline after 1945 looked like narrow substitution before it became systemic. However, no viable alternative reserve asset is accumulating in the background, with the yuan remaining capital-account-restricted and thinly traded outside trade settlement.