BRICS+ countries should accelerate efforts to establish a joint cross-border payments mechanism to reduce dependence on the US dollar, but creating a shared currency would require sweeping economic and institutional reforms that remain difficult to achieve, according to a new report by policy platform BRICS+ Thinking.
The report, published on Friday, called on the expanded grouping of major emerging economies to commit to a common payments framework and ensure their central banks put the necessary technical infrastructure in place.
The proposal offers a more immediate route towards reducing reliance on the dollar than the creation of a single BRICS currency, an idea that has attracted political attention but faces substantial obstacles involving monetary policy, capital controls and differences among member economies.
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The report was authored by Gregory T. Chin, Danny Quah and Jim O’Neill, the former Goldman Sachs economist who coined the BRICS acronym. They argued that cooperation on cross-border payments should become a priority for the group, which includes Brazil, Russia, India, China and South Africa alongside its expanded membership.
“It is absolutely crucial that their central banks embrace this goal and make sure that all the technical requirements are put in place to allow this mechanism to function,” the authors said.
The recommendation comes as emerging economies seek alternatives to financial arrangements heavily dependent on the dollar and Western-controlled payment infrastructure. However, the authors distinguish between building a system that allows members to settle transactions more efficiently in their own currencies and creating a common currency that would require much deeper political and economic integration.
Cross-border payment reform has featured on the BRICS agenda for several years, but progress towards integrating the financial infrastructure of member countries has been limited.
In a declaration following their September summit in India, BRICS leaders said they would continue working towards faster and cheaper international payments. Their priorities included linking national payment systems and expanding the use of local currencies in trade and financial transactions.
A joint payments mechanism could reduce the need for businesses and financial institutions to route every transaction through the dollar-based international banking system. It could also lower transaction costs, shorten settlement times and make trade between member countries easier.
For economies facing restrictions on access to Western financial infrastructure, the issue has an additional dimension. Russia’s exclusion from significant parts of the international financial system following its full-scale invasion of Ukraine in 2022 increased interest among some countries in alternative payment arrangements.
However, reducing dollar dependence does not mean eliminating the dollar from international trade. A payments mechanism can facilitate transactions in different national currencies without requiring members to abandon existing dollar-based arrangements.
That matters because BRICS economies have different trade structures, exchange-rate policies, and levels of financial openness. China and India, for example, have substantial economic influence but also maintain different approaches to capital controls and currency management. Other members have their own monetary and financial priorities.
A system that connects national payment networks and allows transactions in local currencies could therefore provide practical benefits without requiring governments to surrender control over domestic monetary policy.
Its effectiveness is largely tied to technical compatibility, settlement arrangements, exchange-rate conversion, regulatory cooperation and the willingness of central banks to participate. Without agreement on these issues, a joint mechanism could remain a political commitment rather than a widely used financial alternative.
Why a Common BRICS Currency Faces Greater Obstacles
The report was considerably more cautious about the prospect of a shared BRICS currency, arguing that its introduction would require “dramatic reforms” across member economies.
The authors said participating countries would need stronger central bank independence, a common monetary authority and fewer restrictions on capital movements. A viable currency would also have to be freely convertible both domestically and internationally.
“The initial prognosis for the possibility of a BRICS+ currency is not hopeful,” the authors said.
But the difficulties extend beyond technical arrangements. A common currency would require countries with different inflation rates, fiscal positions, economic structures and monetary priorities to operate under a shared monetary framework.
Establishing a common central bank would also raise questions about governance and representation. Members would need to agree on how monetary decisions are made, how voting power is distributed, and whose economic conditions should carry the greatest weight when interest rates or other policy instruments are adjusted.
The authors also pointed to the group’s geographical dispersion and the limited enthusiasm among members for transferring monetary policy authority to a common institution.
These constraints help explain why a shared currency is considerably more difficult to achieve than a cross-border payments system. Countries can cooperate on payment infrastructure while retaining their national currencies and central banks. A monetary union, by contrast, would require them to surrender important elements of economic sovereignty.
The political differences within BRICS also complicate the prospect. Although members share an interest in increasing the role of emerging economies in global financial governance, that does not mean they have agreed on a common monetary policy or a single alternative to the dollar.
Russia and India have both played down the likelihood of a common BRICS currency, while the group has not formally adopted such a proposal.
Pressure from Trump’s Tariff Threat
The debate has also attracted opposition from US President Donald Trump, who has repeatedly threatened 100% tariffs against BRICS members if they create a common currency or support an alternative to the US dollar.
The threats add a trade-policy dimension to an initiative that is primarily concerned with financial infrastructure. Countries considering alternative settlement arrangements must weigh the potential benefits of reducing dollar exposure against the risk of provoking trade tensions with the United States.
However, the push for greater use of local currencies has continued to attract attention since Western sanctions were imposed on Russia in 2022. Those measures demonstrated how access to international financial networks and reserve assets can become instruments of geopolitical pressure.
For some governments, diversifying payment channels is therefore a matter of financial resilience as well as economic efficiency. But diversification does not automatically produce a credible replacement for the dollar, which remains deeply embedded in global trade, financial markets and foreign-exchange reserves.
The BRICS+ report offers a more incremental approach, with its argument that members should concentrate on building a functioning cross-border payments mechanism. That approach, many believe, could deliver measurable benefits while preserving national control over monetary policy.