The BRICS bloc—comprising Brazil, Russia, India, China, South Africa, and newly added members such as Egypt, Iran, United Arab Emirates, Saudi Arabia, and Ethiopia—finds itself at the center of a global economic transformation in 2025. The group’s ambitions have taken a bold new turn, with Brazilian President Luiz Inácio Lula da Silva unveiling an ambitious proposal to create a common currency for the bloc, aiming to reduce dependence on the U.S. dollar and redefine the contours of international trade.
Speaking in São Paulo on August 12, 2025, Lula announced the initiative during an interview, framing it as both an economic and geopolitical move. According to Devdiscourse, the proposal comes at a time of pronounced global turbulence, with the Russian deputy chief of mission stating on August 20 that the role of BRICS as a stabilizing force will only increase in these uncertain times. The timing is no accident: the U.S. dollar recently hit R$5.3870, its lowest value since June 2024, and the bloc faces mounting trade tensions with the United States.
At the heart of Lula’s plan is a desire to facilitate internal BRICS transactions without the need to convert to dollars—a move that could, in theory, insulate member economies from external shocks and foster greater economic autonomy. The idea isn’t entirely new; Lula pointed to a 2004 agreement with Argentina that enabled transactions in reais and pesos as a real-world example of how such a system might work. But this time, the stakes are higher, and the ambitions broader: the new currency would serve as a counterweight to the dollar’s global dominance, especially as U.S. President Donald Trump threatens to slap 10% tariffs on BRICS products, branding the bloc as “anti-American.”
These threats have only fanned the flames. Lula, undeterred, dismissed the prospect of direct talks with Trump and instead vowed to take the matter to the World Trade Organization, promising to defend Brazilian interests on the global stage. As Lula put it, the goal is to "strengthen the bloc’s economic integration" and push for a "more balanced global financial system."
The idea of a BRICS currency isn’t just economic posturing; it’s also a response to a shifting global order. The July 2025 Rio de Janeiro summit saw the proposal gain significant momentum, with leaders like China’s Xi Jinping and India’s Narendra Modi expressing support—albeit with a call for thorough technical studies. Brazil, which assumed the rotating BRICS presidency in 2025, now finds itself leading the charge, tasked with navigating the complex web of technical, financial, and geopolitical hurdles that stand in the way.
Brazil’s leadership is already evident. The BRICS Development Bank, under the stewardship of former President Dilma Rousseff, is set to fund the studies and projects necessary to bring the currency to life. Brazil intends to present a detailed plan at the next summit, focusing on a compensation system based on local currencies or a unit backed by gold and national currencies—a nod to the gold standard of yesteryear. The initial timeline is ambitious: technical discussions throughout 2025, with a prototype currency slated for 2026.
But the road ahead is anything but straightforward. As reported by multiple sources, the creation of a common currency faces formidable obstacles, from the need for a unified banking system and clear governance rules to the stark economic disparities between members. China, the world’s second-largest economy, sits alongside Ethiopia, which continues to grapple with economic crises. Add to that the well-documented rivalries between China and India, and it’s clear that forging consensus will be no small feat.
Still, the momentum is palpable. The real’s 3.7% appreciation against the dollar has strengthened Brazil’s hand, while the dollar’s slide to R$5.3870 has only sharpened the bloc’s appetite for alternatives. The BRICS Development Bank already funds projects in local currencies such as reais and yuan, albeit on a scale dwarfed by the likes of the World Bank. The hope is that a new, gold-backed or basket-based currency could offer a credible alternative, boosting confidence and lowering transaction costs for member states.
These efforts are not occurring in a vacuum. Since 2022, U.S. sanctions on Russia have spurred BRICS members to explore ways to reduce their reliance on the dollar. In 2023, Brazil inked a deal with China to use reais and yuan in trade, a move that has already cut conversion costs and reduced dollar use by 20% in BRICS trade. China, for its part, now conducts 20% of its oil trade in yuan, while India is negotiating rupee-based deals with the UAE. According to the Bank for International Settlements, the dollar still accounts for about 90% of global transactions and 59% of foreign exchange reserves, but the winds of change are blowing.
Lula’s vision draws inspiration from the euro, which itself took years of painstaking negotiation and planning to implement. The European model, with its unified payment systems and shared monetary policy, serves as both a blueprint and a cautionary tale. As Lula emphasized at the Rio summit, the proposed BRICS currency is not meant to replace the dollar globally but to create an "alternative system for intra-bloc trade."
Not everyone is convinced. Internal rivalries—especially between China and India—have made consensus elusive. The technical barriers are daunting: a common currency requires a unified banking system, clear issuance rules, and a willingness to cede some national monetary sovereignty. Who would control the currency? How would it be governed? These are questions that have yet to be answered.
Meanwhile, the United States is watching closely. Trump’s threats of new tariffs are seen by many as an attempt to shore up the dollar’s hegemony—a position that, while still strong, is increasingly challenged by the rise of alternative payment systems and currency arrangements. Economists point to the fragmentation of currency reserves as a possible accelerant for dedollarization, but they caution that any transition will be gradual at best.
Brazil’s role as mediator and agenda-setter is clear. With the 2025 BRICS presidency, the country aims to use its position to push for a "multipolar world" with fewer economic asymmetries. Lula has also prioritized strengthening the BRICS Development Bank, which funds infrastructure and sustainability projects, and broadening the bloc’s focus to include pressing issues like hunger and climate change. The inclusion of new members such as Saudi Arabia and the UAE could further expand the bloc’s influence, which already accounts for 39% of the global economy and 48.5% of the world’s population.
Yet for all its ambition, Brazil remains tethered to the old order: 80% of its international reserves are still held in dollars. Lula, ever the optimist, remains undaunted. "If it fails, someone will have to convince me I’m wrong," he declared, capturing the spirit of a bloc that is determined to chart its own course—even if the path ahead is uncertain and strewn with obstacles.
As the world watches, the BRICS bloc stands at a crossroads, its next moves set to shape not only its own destiny but the future of global finance as well.
