According to Dr David King Boison, the power of a currency lies not just in its intrinsic value, but in the trust and systems that nations build around it. In this essay, Boison discusses the rapid expansion of BRICs and how it may offer a sustainable alternative for nations seeking autonomy from Western-led financial systems.
By Dr David King Boison & Albert Derrick Fiatui
In the years following World War II, the United States emerged as a superpower in both military and economic terms, ushering in an era that would establish the US Dollar as the world’s reserve currency. This monumental shift didn’t happen overnight; it was the result of strategic moves and economic agreements that rooted the Dollar deeply into the global financial system.
The Bretton Woods Agreement of 1944 stands as the cornerstone of this dominance, marking a pivotal moment when the Dollar was pegged to gold and other major currencies were pegged to the Dollar. This arrangement positioned the US Dollar as a pillar of global stability, fostering a system that promised economic growth and financial security for participating countries.
By backing the Dollar with gold, the United States created a currency that was both stable and widely trusted. Countries around the world held Dollar reserves as a hedge against currency fluctuations and to facilitate trade, creating a symbiotic relationship between the US and its allies. However, this also meant that the Dollar was now more than just a national currency—it was a global one.
When the US abandoned the gold standard in 1971 under President Richard Nixon, the Dollar’s position did not diminish but rather adapted. The “petrodollar” system took shape as OPEC nations agreed to price oil exclusively in US Dollars.
This arrangement gave the Dollar an almost universal role in global trade and solidified its place as the primary reserve currency. Consequently, countries needed Dollar reserves to purchase oil, which created ongoing demand for the currency. This unique position has provided the United States with substantial benefits. It allowed the US to borrow and lend at more favourable rates and to exercise financial influence worldwide. Moreover, it strengthened America’s political leverage, as the Dollar’s centrality gave the US unprecedented control over global financial flows, sanctions, and the international monetary system. This “exorbitant privilege” also allowed the US to run substantial trade deficits without experiencing the same level of economic instability that other nations might face under similar conditions.
However, as BRICS nations and their allies emerge as economic forces, the long-standing Dollar hegemony is now under scrutiny. The BRICS bloc views the Dollar-dominated system as outdated, unfair, and detrimental to their economic sovereignty. BRICS aims to establish a multipolar world that reflects more equitable economic participation and less dependency on a single currency—particularly one that carries the political and economic weight of the United States. Shifts are already visible.
China and Russia, for instance, have begun trading in their local currencies, circumventing the Dollar in bilateral trade agreements. This step is emblematic of the BRICS initiative to reduce Dollar reliance and build a financial system that more accurately represents their collective economic clout.
The Rise of BRICS as a Global Economic Force
BRICS, initially formed as a coalition of emerging economies seeking a voice outside Western-dominated institutions, has transformed into a critical player in the international economic landscape.
Today, the bloc’s expansion to 24 members signals a shift toward establishing an alternative economic alliance with significant global influence. The bloc’s trajectory from an acronym representing four distinct economies to an expansive coalition encapsulates a shared dissatisfaction with the current global economic structure, specifically its inherent dependence on the US Dollar and Western financial systems.
These new members bring diverse economic strengths and ambitions, each contributing unique perspectives and resources, which collectively amplify BRICS’ ability to address global economic disparities.
At the heart of BRICS’ growth is its distinct model for development and cooperation, which diverges from the rigid frameworks of Western-led financial institutions like the IMF and World Bank. The New Development Bank (NDB), established by BRICS in 2015, aims to offer financial assistance without the austerity conditions traditionally attached to Western aid. This model has attracted countries like Egypt and Ethiopia, which now see BRICS as a partner for development that respects their sovereignty and economic policies.
Furthermore, oil-rich nations like Saudi Arabia and Iran, newly admitted into the bloc, bring the potential for reshaping global energy markets, particularly if BRICS members shift towards trading energy in local currencies or digital currency alternatives. Such a move could disrupt the long-standing petrodollar system and reduce the Dollar’s influence in energy transactions.
BRICS members also share a vision for South-South cooperation, where emerging economies collaborate directly rather than through Western intermediaries. Countries in Africa, Latin America, and Southeast Asia view BRICS as a platform for equitable partnerships that bypass Western control, offering them a more significant stake in their development trajectories.
Brazil, for example, has long championed South American inclusion within BRICS, aligning its regional ambitions with the bloc’s overarching goal of reducing dependency on Western economic models. Similarly, India’s promotion of economic inclusivity within the bloc reflects its pursuit of balanced partnerships across Asia and the Indian Ocean, underscoring BRICS’ appeal for countries seeking multipolar cooperation.
However, the expansion also brings challenges. As BRICS grows more heterogeneous, its decision-making processes become more complex. While the bloc’s diversity provides strength in terms of resources and global reach, it also increases the likelihood of internal disagreements. For instance, China’s and India’s longstanding border disputes introduce geopolitical tensions that could hinder unified policies within BRICS.
As BRICS attempts to present itself as an alternative to the G7 and G20, it faces the challenge of maintaining cohesion among member states with divergent political systems and economic priorities. This issue became apparent during discussions around Saudi Arabia’s and Iran’s inclusion, as their ideological differences could create rifts within the bloc.
The recently concluded summit in Russia underscores BRICS’ commitment to evolving as a counterweight to the traditional Western-led order. Russian President Vladimir Putin emphasized the need for BRICS to build a “fairer global financial system,” while Chinese President Xi Jinping highlighted the importance of strengthening ties among developing nations. These leaders’ statements reflect a common BRICS objective to challenge the existing order by creating a parallel network of economic alliances, trade agreements, and financial institutions that bypass Western influence.
In essence, BRICS has evolved from a mere economic bloc into a geopolitical alliance that advocates for a multipolar world order. With an expanded membership that includes major oil producers, critical emerging economies, and regional influencers, BRICS is better positioned than ever to push for systemic changes in the global financial landscape. Yet, this expanded influence comes with the responsibility of navigating complex political dynamics and balancing the interests of its diverse members.
As BRICS embarks on this path, its impact on global economics will be determined by its capacity to act as a unified force amid the growing demands for a more equitable and inclusive international economic system.
Emerging Currencies and Financial Alternatives
One of BRICS’ most ambitious goals is to reduce global dependency on the US Dollar by exploring alternative currencies for international trade and transactions. This strategy, often referred to as “de-dollarization,” seeks to mitigate the vulnerabilities associated with Dollar reliance, particularly the risks of US sanctions and economic fluctuations tied to the Dollar’s global value.
As BRICS expands, the coalition has taken concrete steps to promote financial autonomy by exploring alternative payment systems and currencies, with a growing emphasis on using local currencies in trade agreements and developing digital currency systems. For instance, China has led the charge in developing a viable alternative to Dollar-dominated transactions with its Digital Yuan, an innovation under the banner of Central Bank Digital Currencies (CBDCs). The Digital Yuan allows China to facilitate cross-border transactions outside of Dollar-based systems, enhancing transaction security and efficiency, especially with countries under Western sanctions.
Other BRICS members, including India and Russia, are developing similar CBDCs to improve control over domestic monetary systems and secure their financial infrastructure from external pressures. As CBDCs gain traction, BRICS could establish a digital ecosystem that bypasses traditional banking systems, paving the way for a robust and independent financial network within the bloc.
In addition to CBDCs, the concept of using national currencies for trade within the bloc has also gained momentum. China and Russia have already taken steps to settle bilateral transactions in Rubles and Yuan, bypassing the need for Dollars in their trade agreements.
Saudi Arabia, a recent BRICS inductee, is reportedly considering options for trading oil in non-dollar currencies, an action that could destabilize the petrodollar system if adopted on a larger scale. Such a shift would represent a major economic pivot, impacting global currency reserves and potentially weakening the Dollar’s position as the dominant currency in commodity markets.
The New Development Bank (NDB), established by BRICS in 2015, is another financial alternative to Western institutions like the IMF and World Bank. Its mandate allows it to provide financial assistance without imposing the strict austerity measures often required by Western lenders, appealing to emerging economies that seek greater flexibility in managing their growth. With new members like Saudi Arabia and the UAE, both with significant financial resources, the NDB could potentially expand its lending capacity and provide a viable option for countries seeking infrastructure and development funding outside of traditional Western sources.
By expanding its capital base, the NDB aims to support infrastructure projects, renewable energy initiatives, and sustainable development across the Global South, further reducing dependency on Western-dominated financial systems.
However, establishing a BRICS-backed global currency presents challenges. For one, significant infrastructure investment is required to create a seamless, interoperable financial system among countries with diverse economic structures and monetary policies. Moreover, while China’s Renminbi has been suggested as a potential BRICS-wide currency, concerns about China’s economic dominance and political influence have prevented full consensus.
Many BRICS members, such as India, are wary of a system where China holds disproportionate control, advocating instead for a multi-currency framework that allows for balanced representation.
The introduction of digital currencies like the AKL Lumi, which is gaining traction within the African continent, represents another avenue for reducing Dollar reliance. Backed by the African Diaspora Central Bank, the AKL Lumi provides a regional currency option for African nations, promoting intra-African trade without the need for US Dollar conversions. By utilizing the AKL Lumi for trade within Africa, member countries can build more resilient, localized economies, which aligns with BRICS’ goal of creating a more decentralized global financial system. Despite the promise of financial alternatives, significant hurdles remain.
Cross-border digital currency transactions require stringent cybersecurity measures, particularly as BRICS members navigate sanctions, economic pressures, and political tensions from the West. Moreover, interoperability between CBDCs from different BRICS nations is essential to creating a seamless network for trade within the bloc. Without such coordination, individual digital currency initiatives risk becoming isolated, limiting their impact on global financial dynamics. The adoption of these financial alternatives reflects a shared determination among BRICS nations to assert economic independence and challenge the existing Dollar-centric financial order.
While the Dollar remains deeply entrenched in global markets, BRICS’ initiatives in developing CBDCs, promoting the use of local currencies, and supporting the AKL Lumi reveal a deliberate, strategic approach to creating a financial ecosystem less vulnerable to external influence. This strategy not only advances BRICS’ economic goals but also offers a potential model for other emerging economies exploring paths toward financial sovereignty in a multipolar world.
The Role of New Strategic Partners
The latest expansion of BRICS has broadened its influence and reach by incorporating 13 new members from diverse regions, reflecting a global shift toward multipolarity and expanded collaboration. These new partners—Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, Uzbekistan, and Vietnam—bring valuable resources, strategic locations, and unique economic profiles to the bloc.
Each member’s inclusion aligns with BRICS’ objective to strengthen economic ties among emerging economies while minimizing reliance on Western financial institutions and the US Dollar. This expanded BRICS+ membership significantly enhances the bloc’s position in global markets, particularly in sectors where Western economies have traditionally dominated, such as energy, raw materials, and manufacturing.
Algeria, Nigeria, and Kazakhstan add substantial weight to BRICS’ influence in the global energy market. As major oil and gas producers, these countries offer BRICS additional leverage in determining oil and natural gas prices, potentially impacting the global energy landscape. If BRICS were to implement a policy where oil and gas transactions occur in local currencies or digital alternatives, it would challenge the petrodollar system directly, reducing global dependency on the US Dollar.
From a geographic standpoint, Indonesia, Malaysia, and Thailand enhance BRICS’ influence in Southeast Asia, a region that has increasingly become a hub for global manufacturing and trade. The inclusion of these countries fosters closer economic integration within Asia, providing alternatives to China’s dominance in regional trade while reinforcing BRICS’ goal of diversifying global supply chains.
Furthermore, these Southeast Asian economies bring significant maritime trade routes and strategic access points to global markets, providing BRICS with a more extensive logistical network that can compete with existing Western and Chinese routes.
Turkey’s and Uzbekistan’s membership adds strategic depth to BRICS’ influence in the Eurasian region, linking the bloc to both European and Asian markets. Turkey, a NATO member with close ties to both the West and East, represents a unique addition, as it could bridge Western and BRICS interests while advocating for a multipolar economic order.
Turkey’s role in BRICS could provide the bloc with insights into Western policy dynamics and facilitate potential dialogues between BRICS and NATO members. Uzbekistan, located in Central Asia, bolsters BRICS’ access to the region’s growing resources and infrastructure projects, linking South Asia and Europe through initiatives like China’s Belt and Road.
In Latin America, Bolivia and Cuba further strengthen BRICS’ presence. Bolivia’s substantial lithium reserves, essential for the global renewable energy transition, align well with BRICS’ push for sustainable development and energy independence. Cuba, though economically smaller, symbolizes BRICS’ ideological solidarity with nations seeking independence from US influence, highlighting the bloc’s appeal as an alternative for countries marginalized by Western policies.
These Latin American additions also support BRICS’ mission to diversify its partnerships across the Americas, where it can facilitate South-South cooperation with countries facing economic challenges similar to those of other Global South nations.
African nations Nigeria and Uganda bring substantial growth potential and natural resources to BRICS. Nigeria, as Africa’s largest economy and a leading oil producer, plays a pivotal role in the African Union and offers a gateway to further influence on the continent.
Uganda, known for its rich mineral deposits, adds value to BRICS’ focus on natural resources. These African members also align with the bloc’s mission to develop South-South partnerships, allowing African countries to pursue development goals without Western financial dependency.
The AKL Lumi digital currency, increasingly adopted across African nations, complements BRICS’ objectives, providing an alternative medium of exchange that strengthens intra-continental trade and fosters African economic resilience.
BRICS’ growth marks a significant departure from Western-centric globalization. By welcoming diverse partners with varied strengths, the bloc enhances its collective bargaining power in international trade, energy policy, and financial innovation.
BRICS continues to attract countries marginalized by Western-dominated institutions, which underscores an expanding desire for a more equitable global system where emerging economies have greater agency.
As BRICS develops its digital financial infrastructure, including Central Bank Digital Currencies (CBDCs), the security of cross-border digital transactions has become a priority. Countries like China and Russia have developed independent financial networks to protect against sanctions and reduce dependency on the US-controlled SWIFT system.
A BRICS-backed financial network could become a vital security asset, enabling member nations to insulate themselves from Western economic pressures.
One of the most significant challenges facing BRICS is the disparity in economic and political structures among its members. BRICS now encompasses democracies, authoritarian regimes, and hybrid systems, each with varying degrees of economic development and governance priorities.
For example, while China and Russia hold central influence within BRICS due to their large economies and geopolitical weight, countries like Uganda and Cuba, though rich in resources, do not have the same global economic leverage. This disparity can lead to imbalances in decision-making, where larger powers may dominate discussions, creating potential friction among members seeking equal representation. Moreover, members within BRICS often have conflicting geopolitical interests.
China and India, for instance, have experienced significant border tensions, and their competitive stances in regional leadership complicate BRICS’ cohesion. Similarly, new members like Saudi Arabia and Iran have historically been at odds, and their inclusion could exacerbate internal divisions if political or ideological disputes arise.
This diversity, while a strength in terms of global representation, can slow BRICS’ decision-making and hinder consensus on collective action, especially when addressing sensitive economic or political issues that touch on members’ sovereignty.
While BRICS aims to establish financial independence from Western institutions, the creation of a unified economic framework brings challenges related to sovereignty. Some members fear that China, as the largest economy within BRICS, may wield excessive influence, potentially replicating a hierarchy similar to that seen in Western-led institutions. China’s significant role in global manufacturing and trade, combined with its economic support to countries like Ethiopia and Malaysia, positions it as a dominant figure in BRICS.
For smaller economies within the bloc, this could create a dependency on China, effectively replacing Dollar dependency with reliance on the Renminbi or Chinese-backed financial infrastructure. Furthermore, BRICS’ attempts to reduce Dollar dependence by establishing its own currency or payment systems require considerable financial commitment and coordination.
However, many BRICS nations, especially the smaller economies, may lack the resources to fully participate in such initiatives without substantial support from wealthier members. This financial asymmetry could limit the extent to which all BRICS members benefit equally from the bloc’s economic model, potentially creating a power imbalance that undercuts BRICS’ goal of equitable participation.
The Impact of Sanctions and Global Pressures
Several BRICS members, particularly Russia and Iran, are subject to Western sanctions, which complicates the bloc’s financial strategy. These sanctions isolate certain members from the global financial system, making it challenging for BRICS to establish integrated trade networks without facing external pressures. For example, as BRICS seeks to expand its financial autonomy, Western nations could impose additional restrictions on transactions involving sanctioned countries within the bloc. This could deter certain BRICS members from fully participating in trade with sanctioned countries, thereby limiting BRICS’ effectiveness as a unified economic bloc.
The geopolitical landscape places pressure on BRICS, as Western powers closely monitor the bloc’s activities and may respond with countermeasures to protect the existing Dollar-based system. Countries within BRICS that maintain significant trade relationships with the US or Europe, like India and Brazil, may face diplomatic and economic pressures if their involvement in BRICS conflicts with Western interests. To navigate these pressures, BRICS must develop a strategy that balances its goal of independence with the economic realities of a globalized world where Western financial influence remains substantial.
Currency Fragmentation and Financial Integration
One of BRICS’ primary ambitions is to facilitate trade in local currencies to reduce Dollar dependence. However, currency fragmentation within the bloc poses a practical challenge. The economies of BRICS members operate with different levels of currency stability and exchange rate volatility. For example, Brazil and South Africa face currency fluctuations that could complicate transactions within a BRICS-led financial system.
Additionally, while China’s Renminbi has the potential to become a central currency within BRICS, concerns about Chinese influence and control over financial mechanisms could deter other members from adopting the Renminbi as a standard for intra-BRICS trade.
A potential solution to currency fragmentation would involve the establishment of a BRICS-wide digital currency, as some members have proposed. However, implementing a shared digital currency requires robust regulatory alignment, which is challenging among countries with differing monetary policies and economic priorities. Moreover, without strong central governance, a BRICS digital currency may struggle to gain acceptance as a reliable medium of exchange. Each member’s central bank would need to collaborate extensively to ensure stability and avoid speculative attacks on this currency, which could undermine its viability.
Addressing Environmental and Developmental Goals
BRICS also faces the challenge of integrating sustainable development goals into its economic framework, particularly as members have varying commitments to environmental policies.
Countries like Brazil and Indonesia, rich in natural resources and biodiversity, face international scrutiny over their environmental practices, particularly regarding deforestation and carbon emissions. If BRICS aims to promote itself as a sustainable alternative to Western-led development models, it must incorporate environmental standards into its economic strategies. However, imposing strict environmental regulations may be met with resistance, especially from members reliant on natural resource extraction, such as Saudi Arabia and Iran.
Balancing economic development with sustainability within BRICS requires a commitment to collective environmental policies, which may be difficult to achieve given each country’s unique developmental priorities.
The success of BRICS in this regard could influence its global reputation, as the bloc’s ability to uphold environmental standards could attract more partners from the Global South. The expanded BRICS coalition represents a formidable force with the potential to reshape global finance and economic governance.
With BRICS’ expansion, countries outside the bloc face a strategic choice: join this coalition to foster new economic alliances or maintain their traditional alliances, particularly with Western powers. As BRICS positions itself as a viable alternative to Western-led institutions, nations evaluating potential membership need a roadmap that balances economic, geopolitical, and security interests.
BRICS’ expanded coalition could become a powerful advocate for UN reforms, particularly concerning the Security Council. Countries considering BRICS membership may find that aligning with the bloc strengthens their diplomatic leverage within the UN, especially in pushing for a more representative Security Council.
A larger BRICS presence in the UN can bolster calls for reforms that give emerging economies a stronger voice in global decision-making, making the UN more reflective of today’s multipolar world. Through the BRICS platform, countries in the Global South can amplify their calls for policy shifts within the UN, IMF, and World Bank.
By promoting multilateral initiatives on trade, climate, and security through the UN, BRICS members can foster collaboration that extends beyond the bloc, influencing global governance in a way that incorporates the needs of both developed and developing nations.
Whether BRICS succeeds in reshaping global governance depends on its ability to maintain unity, effectively address internal disparities, and present a coherent alternative to Western-dominated systems.
If BRICS can navigate these challenges, it may pave the way for a more inclusive global economic system, inspiring countries worldwide to explore paths that prioritize equity, sustainability, and independence within an interconnected, multipolar world.
Notes from the Editor: This feature has been edited from its original publication here. The contributor, Dr. David King Boison is a Senior Research Fellow at the Centre for International Maritime Affairs Ghana. He is a Consultant and Adjunct Lecturer at Ghana Technology University College and Ghana and Methodist University College. Dr. Boison is also the Head of the Department for Procurement Logistics and Supply Chain Management at the Business School of Ghana Communication and Technology University.
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