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In August 2023, the leaders of the BRICS nations — Brazil, Russia, India, China and South Africa — gathered in Johannesburg to declare their ambition to rewire the international system. A centerpiece of that ambition was a call to reduce dependence on the US dollar. For some, the idea sounded like deja vu; de-dollarization has been a recurring theme in emerging markets since the early 2000s. But this time, the stakes feel different. Global polarization is intensifying, financial weaponization has become normalized and the credibility of existing multilateral institutions is eroding. Yet, for all the hype, the BRICS project remains deeply flawed and uneven.

The notion that BRICS could reshape the global financial order rests more on aspiration than reality. While dollar dominance is indeed being reassessed — not just by geopolitical rivals but also by pragmatic middle powers — building a credible alternative requires more than shared discontent. It demands deep capital markets, interoperable infrastructure, credible institutions and — above all — mutual trust. On all these counts, BRICS is still struggling.

The desire to reduce dollar reliance is not simply ideological but a reaction to a financial architecture long shaped by US interests. The 2008 financial crisis exposed the dangers of global dependency on Wall Street. The 2022 sanctions on Russia, which froze hundreds of billions in central bank reserves and cut Moscow off from SWIFT, sent a clear signal to other BRICS members: your assets can be turned into weapons overnight.

The desire to reduce dollar reliance is not simply ideological but a reaction to a financial architecture long shaped by US interests

Dr. John Sfakianakis

But does fear translate into capability? Not necessarily. Incremental moves are already underway. China has expanded its Cross-Border Interbank Payment System and accelerated digital yuan pilots across Asia and Africa. India has begun settling some trade in rupees, particularly with Russia and the UAE. Russia is developing Mir and the System for Transfer of Financial Messages to bypass Western financial rails. Brazil and South Africa are exploring fintech-led payment corridors. Yet, taken together, these initiatives remain fragmented, politically fragile and institutionally weak.

The internal contradictions of BRICS are glaring. China’s outsized role in the bloc breeds discomfort among its partners. The yuan remains nonconvertible. India and China are strategic competitors. Russia is economically isolated. Brazil and South Africa are preoccupied with their own fiscal instability. What unites them is not a shared monetary strategy but a defensive impulse — a desire to insulate themselves from the coercive tools of the current system without agreeing on a viable alternative to replace it.

In this respect, the BRICS bloc echoes the spirit of the Non-Aligned Movement of the 1960s — born from frustration with superpower domination, yet too ideologically and strategically diverse to forge a coherent economic alternative. These aspirations are further undercut by a chronic lack of fiscal and data transparency across the bloc, which undermines investor confidence and complicates efforts to build trust in any shared monetary or institutional arrangement.

Moreover, the dollar is not just a medium of exchange — it is an ecosystem. From commodity pricing and bond issuance to foreign exchange markets and central bank reserves, it is woven into the plumbing of global capitalism. Displacing it would require an alternative that is not only politically palatable but technically superior. BRICS is nowhere near delivering that.

The New Development Bank and the Contingent Reserve Arrangement — touted as BRICS’ answer to the International Monetary Fund and the World Bank — have underperformed. Lending volumes are limited. Governance structures are opaque. And the credibility of any shared macroeconomic framework remains questionable in the absence of institutional convergence.

Even digital currencies, often billed as a leapfrog solution, are no silver bullet. China’s e-CNY remains tightly controlled and untested at scale. Interoperability with other BRICS central bank digital currencies remains aspirational. Moreover, few of these economies inspire enough investor confidence to turn their currencies into regional, let alone global, anchors.

Displacing the dollar would require an alternative that is not only politically palatable but technically superior

Dr. John Sfakianakis

One point bears repeating: the US may well benefit from a credible external challenge. A push from BRICS could serve as a cold slap in the face — forcing America to reckon with the fragility of its own advantages. For too long, dollar dominance has bred complacency. If confronted with a viable challenge, the US could rediscover its competitive edge — leveraging innovation, capital markets and entrepreneurial dynamism to future-proof its leadership.

But let’s be clear: BRICS is not that challenge yet. It is a concept in search of coherence — a geopolitical brand lacking operational capacity. Its declarations are bold but its execution remains underwhelming. The underutilization of the New Development Bank, for example, is telling: with lending volumes far below expectations and project delivery uneven, the institution reflects the broader gap between BRICS’ ambitions and its administrative muscle.

As for the Gulf states and other middle powers watching this evolution, caution — not commitment — is the prudent course. Strategic hedging makes sense. Deepening financial links with BRICS, especially through trade settlement, infrastructure finance and digital innovation, is worth exploring. But abandoning the Western-led system is neither practical nor desirable.

The future is hybrid. Gulf countries will continue to invest the bulk of their sovereign assets in Western markets, manage reserves in dollars and euros, and rely on Western institutions for legal recourse and financial stability. Take ºÚÁÏÉçÇø’s Public Investment Fund, for instance: despite deepening ties with China and India, 40 percent of its portfolio remains invested in the US — across equities, tech, infrastructure and real estate. Engagement with BRICS must be pragmatic, flexible and bounded by clear-eyed realism.

The global financial order is evolving — but slowly and with considerable friction. The shift from sterling to the dollar took decades and two world wars. Even the EU, despite decades of political and economic integration and the introduction of the euro, continues to wrestle with internal divisions and incomplete fiscal unity. This ongoing struggle underscores how extraordinarily difficult it is to build a credible alternative currency system. The notion that a loosely stitched alliance of emerging economies can replicate such a transformation — absent deep coordination, robust institutions and global trust — is, at best, premature and, at worst, a triumph of hope over infrastructure.

If BRICS truly wants to reshape the financial order, it must start by getting its own house in order. Until then, it will remain more a rhetorical vehicle than a real force for monetary transformation.

• Dr. John Sfakianakis is Chief Economist at the Gulf Research Center and Chief Global Strategist at the Paratus Group.