BRICS Currency Usage

Trends
An analytical examination of key metrics demonstrating the evolving role of
BRICS currencies in global financial markets and their gradual challenge to
traditional dollar dominance.
Global Financial Integration Metrics

6.4% 6.8% 1.7T 15%

SWIFT Transactions OTC FX Derivatives Panda Bonds Cross-Border Lending
Over-the-counter foreign CNY trillion in outstanding
BRICS currency share in exchange derivatives market Panda Bonds, representing BRICS foreign exchange share
Society for Worldwide share achieved by BRICS approximately 0.8% of the in cross-border lending
Interbank Financial currencies in 2022, indicating global bond market, activities, marking a
Telecommunication increased sophisticated demonstrating China's significant 6 percentage point
transactions recorded in 2024, trading activity. expanding offshore yuan increase from previous
reflecting growing institutional markets. periods.
adoption of alternative
These payment
metrics collectively
systems. illustrate the gradual but measurable shift towards BRICS currency utilisation in international financial
markets. Whilst growth is notable across all categories, the absolute figures remain relatively modest compared to traditional
reserve currencies, particularly the US dollar. The data suggests a steady trajectory of financial integration amongst BRICS nations,
though comprehensive global adoption remains a long-term prospect requiring sustained institutional development and economic
coordination.
International Trade Dynamics and De-dollarisation Patterns
Intra-BRICS Trade Integration

The 28% share of combined trade turnover within BRICS nations in 2023 represents a significant milestone in regional economic
integration. This figure demonstrates the growing preference for bilateral trade arrangements that bypass traditional dollar-
denominated transactions, creating natural demand for alternative settlement currencies.

The expansion of intra-BRICS trade reflects not merely economic convenience but strategic positioning against potential sanctions
regimes and currency volatility associated with external monetary policies. This trend supports the development of regional value
chains and supply networks that operate independently of Western financial infrastructure.

Energy Markets Transformation

BRICS+ nations now control 37% of emerging market fuel trade as of 2023, whilst contributing 30% of global oil production. This
Central Bank Digital Currency: The m-Bridge
Initiative
01 02

Wholesale CBDC Architecture USD Intermediary Elimination

The m-Bridge platform represents a sophisticated wholesale The platform's primary innovation lies in facilitating direct
Central Bank Digital Currency system specifically designed for currency exchanges without requiring US dollar intermediaries.
large-value cross-border transactions. Unlike retail CBDCs, this This capability addresses one of the most significant structural
system focuses on interbank settlements and institutional advantages of dollar dominance—its role as the universal bridge
transfers, providing the infrastructure foundation for alternative currency in international transactions.
payment rails.
03 04

Operational Advantages Implementation Challenges

The system delivers instant settlement capabilities, reduced Significant obstacles include establishing robust governance
transaction costs, and continuous 24/7 availability. These frameworks, securing widespread bank adoption, developing
technical improvements address longstanding inefficiencies in comprehensive legal frameworks, and maintaining adequate
correspondent banking relationships and cross-border payment liquidity commitments across participating jurisdictions.
processing times.
Unified Currency Scenario Analysis
Regional Impact Feasibility Framework Strategic Implications
Assessment
Success depends critically on The currency would likely target
A unified BRICS currency would likely achieving economic alignment developed market currencies (Euro,
reduce reliance on the US dollar amongst members with vastly Yen, Pound Sterling) initially, as these
within the regional bloc whilst different development levels and represent more accessible market
significantly lowering transaction economic structures. Political share than direct dollar displacement.
costs for member nations. The consensus remains challenging given This approach aligns with historical
initiative would create natural varying national interests and patterns of currency competition and
Institutional readiness requires Long-term success would require
economies of scale in financial sovereignty concerns. adoption.
substantial investment in financial sustained economic growth
services and reduce exchange rate
Historical precedents suggest that infrastructure, regulatory convergence, political stability, and
volatility within the trading bloc.
regional currencies typically challenge harmonisation, and the establishment the development of deep, liquid
other developed market currencies of supranational monetary authorities financial markets comparable to
before directly confronting the capable of managing a multi-trillion- existing reserve currency jurisdictions.
dominant reserve currency, creating a dollar currency area.
graduated transition pathway.
Strategic Policy Recommendations Framework
Phased Integration Approach
Implementation should follow a carefully structured timeline beginning with enhanced monetary coordination mechanisms, followed by
gradual fiscal policy alignment. This approach allows for learning and adjustment whilst minimising systemic risks to member economies.

Initial phases could focus on bilateral currency swap agreements, coordinated central bank policies, and harmonised financial regulations
before progressing to more comprehensive integration measures.

Adaptive Flexibility Mechanisms

Policy frameworks must accommodate the diverse economic realities of member nations, ranging from commodity exporters to
manufacturing economies to service-oriented markets. Flexible implementation allows stronger economies to proceed whilst providing
transition support for developing members.
Variable geometry approaches, where different aspects of integration proceed at different speeds, can maintain momentum whilst respecting
national economic constraints and political considerations.

Institutional Strengthening
Robust central banking cooperation, comprehensive oversight mechanisms, and effective dispute resolution procedures form the institutional
foundation for currency union success. These institutions must command sufficient authority and resources to manage monetary policy
across diverse economies.
Investment in technological infrastructure, regulatory expertise, and crisis management capabilities will prove essential for maintaining system stabilit
Implementation Challenges and Risk Mitigation
Stakeholder Engagement Strategy

Comprehensive awareness campaigns targeting financial institutions, multinational corporations, and government
agencies will prove crucial for adoption success. These initiatives must address technical capabilities, regulatory
compliance requirements, and transition costs.
Public-private partnerships can facilitate knowledge transfer and reduce implementation barriers, particularly in
developing sophisticated financial market infrastructure and training programmes for financial professionals.

• Financial sector workshops and certification programmes

• Corporate treasury management training initiatives
• Government official exchange programmes
• Academic research partnerships and policy analysis
Progress Indicators in De-dollarisation Strategy
Foreign Exchange Reserves Diversification Global Market Penetration
BRICS central banks have systematically increased non-dollar reserve BRICS currency usage in international markets continues expanding,
holdings, with particular emphasis on gold accumulation and regional though from relatively modest baseline levels. The growth trajectory
currency positions. This trend reflects deliberate policy choices to reduce indicates increasing acceptance and institutional capacity for alternative
dependency on US Treasury securities and dollar-denominated assets. currency management.
The diversification strategy extends beyond simple portfolio rebalancing to Key indicators include rising market maker participation, expanding
include strategic commodity stockpiling and alternative investment derivative markets, and increased integration with international payment
vehicles that maintain value independently of dollar fluctuations. systems beyond traditional Western infrastructure.

1 2 3

Trade Settlement Evolution

Bilateral trade agreements increasingly feature local currency settlement
mechanisms, reducing transaction costs and exchange rate risks for
participating nations. These arrangements create natural demand for
BRICS currencies whilst diminishing dollar circulation requirements.

The expansion of currency swap agreements and credit facilities

denominated in member currencies provides the liquidity infrastructure
necessary for sustained alternative settlement systems.
Long-term Success Determinants

Strategic Consensus

1 Unified vision amongst leadership

Economic Convergence
2 Alignment of development trajectories and monetary policies

Institutional Development
3 Robust financial architecture and regulatory frameworks

Market Infrastructure
4 Deep liquidity, sophisticated trading systems, and comprehensive settlement mechanisms

Global Integration
5 Widespread adoption by international institutions, corporations, and trading partners
beyond the immediate BRICS bloc

The hierarchical nature of these success factors demonstrates that foundational elements must be established before progressing to more complex integration phases. Strategic consensus at
the leadership level enables the political commitment necessary for sustained policy coordination. Economic convergence provides the technical foundation for monetary integration, whilst
institutional development creates the operational framework for currency management.
Market infrastructure development requires substantial investment and time, but provides the liquidity and efficiency necessary for international adoption. Global integration represents the
ultimate objective, requiring sustained performance across all lower-level criteria whilst maintaining flexibility to adapt to changing international economic conditions.
Executive Summary and Strategic Outlook
Unified Currency Potential

A unified BRICS currency presents substantial opportunities for trade efficiency improvements, enhanced investment flows, and increased
regional economic influence. The initiative could significantly reduce transaction costs within the bloc whilst providing greater monetary
policy independence from external influences.
However, implementation faces considerable obstacles including economic divergence amongst member nations, complex governance
requirements, and substantial upfront investment costs in institutional and technological infrastructure.

De-dollarisation Progress Assessment

The BRICS de-dollarisation strategy demonstrates measurable progress across multiple dimensions. Foreign exchange reserve
diversification, increased gold holdings, and expanding intra-bloc trade turnover indicate systematic movement away from dollar
dependency.