Why de-dollarization discussions are more talk, less action
BRICS leaders have asserted the need to use local currencies in intra-BRICS trade to cut dependency on dollar.

TL;DR
- BRICS leaders discussed expanding trade in local currencies to reduce dependence on the U.S. dollar.
- Reasons for de-dollarization include geopolitical tensions, economic sanctions, and U.S. tariff policies.
- Experts express doubts about BRICS' ability to move away from the dollar due to internal conflicts and lack of integration.
- The U.S. dollar dominates foreign exchange markets, with 89% of the forex market share.
- South African President Cyril Ramaphosa urged greater use of local currencies and stronger cross-border payment systems.
- Iran and Russia, affected by sanctions, pushed for developing payment, settlement, and depository infrastructure within BRICS.
- Key hurdles include lack of financial integration, trade imbalances, and distrust between China and India.
- BRICS lacks the institutional, financial, and macroeconomic infrastructure to replace the dollar's liquidity and trust.
- Former U.S. President Donald Trump threatened BRICS with tariffs if they moved away from the dollar.
- BRICS members accounted for 27% of world output in 2024, but intra-BRICS trade was only about 5% of world trade.
- Few concrete steps have been taken towards expanding trade in national currencies.
- Russia and China have accelerated settling trade in rubles and yuan due to U.S. sanctions, not coordinated BRICS policy.
- Most BRICS currencies lack deep liquid markets, discouraging their use in global trade.
- Competing interests, such as the India-China rivalry, hinder cohesion and de-dollarization efforts.
- India benefits from its trade relationship with the U.S. and has a large trade deficit with China, making de-dollarization unfavorable.
- BRICS members have different priorities for reducing dollar exposure.
- No BRICS-led alternative currently matches the dollar's liquidity, market depth, credibility, and global acceptance.