The recent expansion and evolving goals of the BRICS bloc signal an intensifying competition with Western economies, potentially challenging the US dollar’s central role in international trade.

Originally composed of Brazil, Russia, India, China, and South Africa, BRICS expanded in 2024 to include Egypt, Ethiopia, Iran, and the UAE. At its 16th summit in Kazan, Russia, the bloc made clear its intentions to advance its own payment system, BRICS Pay, as an alternative to the SWIFT network, which largely facilitates transactions in US dollars.

BRICS now represents about 45% of the global population and 35% of global GDP, positioning it as a formidable force compared to the G7’s 10% of the population and 30% of global GDP. This shift suggests a decline in the G7’s influence over global economic affairs.

BRICS’ objectives have evolved from advocating for reforms within existing multilateral financial institutions to creating new frameworks that can challenge the traditional power structures. The inclusion of oil-rich nations within BRICS gives the bloc even more economic clout if it can unite its members on shared goals, despite individual political and commercial interests.

At the Kazan summit, BRICS Pay emerged as a central initiative, designed to facilitate trade within the bloc without relying on US dollars. Utilizing blockchain technology and tokens, BRICS Pay aims to bypass SWIFT, reducing transaction costs and potentially shielding member nations from Western sanctions.

The exclusion of Russian banks from SWIFT has further fueled efforts to create an alternative financial system. BRICS Pay is being positioned as a tool to enhance economic efficiency and minimize the impact of sanctions.

Former IBA Asia Pacific Regional Forum Co-Chair Ramesh Vaidyanathan notes that BRICS Pay could reshape global trade, helping to reduce the US dollar’s dominance and create a more equitable trade environment for developing nations. He suggests that it may trigger increased competition between Western and Eastern economic models, with significant geopolitical consequences.

However, the challenge of de-dollarizing the global trade system remains, with doubts over the feasibility of a unified BRICS currency. Experts like Michael Diaz highlight the national security concerns that could prevent such unification. Despite these hurdles, the growing cohesion within BRICS could lead to more fragmented global trade, with emerging economies forming competing blocs.

The increasing influence of BRICS, especially China, within global markets contrasts with the more protectionist tendencies of certain members. As Brazil takes over the presidency in 2025, the direction the bloc will take remains uncertain. However, tensions with Western economies are likely to intensify, and countries aligning with Iran, Russia, and China may face increased scrutiny and sanctions from the US and its allies.

As BRICS continues to expand and coordinate policies, its efforts to challenge the US dollar’s global dominance may reshape the future of international trade and financial systems. The bloc’s unity and emerging financial initiatives are not to be underestimated in the ongoing economic competition between the West and the Global South.