- Several BRICS members continue to prefer using the US dollar for trade settlements.
- Russia expresses disappointment at the reluctance to adopt a new BRICS payment system.
- India, Brazil, and South Africa have moved away from using the Chinese yuan in favor of the US dollar.
- Only Russia, China, and Iran push to replace the US dollar due to sanctions and strategic interests.
- US dollar settlements persist largely because they avoid restrictions and support economic stability for member nations.
Members of the BRICS alliance are showing a strong preference for settling trade payments in the US dollar despite discussions on forming a new cross-border payment system. This shift comes as some nations, including India, have distanced themselves from alternative systems and expressed continued interest in the USD. Other countries like Brazil and South Africa have also stepped back from the Chinese yuan, opting to conduct trade in US dollars.
Russia’s Finance Minister Anton Siluanov highlighted that this preference for the US dollar is a key obstacle to establishing a new payment system within BRICS. He noted that progress has stalled because many member countries are unwilling to move away from dollar settlements, which currently present fewer restrictions and vulnerabilities. This has affected the alliance’s ability to move forward on a unified payment platform.
According to Siluanov, only a few members like Russia, China, and Iran are keen to abandon the US dollar for cross-border transactions. These countries face economic sanctions that limit their access to international financial networks, making alternatives necessary. China also seeks to internationalize its yuan and reduce the dominance of the US dollar in global trade.
“We settle accounts directly, so as not to be vulnerable to any external influences. This is most important. Therefore, one of the topics is establishing a cross-border settlement system within BRICS. This is a rather tenuous issue, as not everyone is ready to participate. Many are satisfied with settlements in US dollar as long as there are no restrictions,” stated Siluanov as cited in the report.
The stance of BRICS members reflects the economic importance of the US dollar, which remains central to their gross domestic product and financial systems. Many local currencies have weakened significantly, making a switch away from the dollar financially risky and likely to undermine economic growth. This situation contrasts with the original BRICS objective to challenge US dollar hegemony in international trade.
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