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BRICS: A Potential Challenge to The U.S. Dollar Dominance

Researcher Supervisor

Malaika Shamim Alam Dr. Noor Fatima

877/FSS/BSIR/F20 Chairperson, IIUI

Department of Politics and International Relations

Faculty of Social Science

International Islamic University Islamabad

 Certificate

Certified that contents and form of thesis entitled " BRICS Mobilization: A Potential Challenge

to US Dollar Dominance " submitted by Malaika Shamim Alam Reg#877/FSS/BSIR/F20 have

been found satisfactory for requirements of the degree of BS International Relations

Prof. Dr. Noor Fatima

Acting Chairperson
Department of Politics & International Relations
International Islamic University, Islamabad

Dr. Asma Rashid

Department of Politics & International Relations
International Islamic University, Islamabad:

Dr. Nasreen Akhter

Department of Politics & International Relations
International Islamic University, Islamabad

Dr. Nadia Awan

Faculty of Social Sciences
International Islamic University. Islamabad

1
 DECLARATION BY THE CANDIDATE

I hereby declare that the project report entitled " BRICS Mobilization: A Potential Challenge

to US Dollar Dominance” submitted by me to International Islamic University Islamabad in

partial fulfillment of the award of the degree of BS Honors in INTERNATIONAL

RELATIONS DEPARTMENT is a record of bona fide project work carried out by me under

the guidance of Dr. Noor Fatima. I further declare that the work reported in this project has

not been submitted and will not be submitted, either in part or in full, for the award of any other

degree or diploma in this institute or another institute or university.

Student Signature: Date:

24. June.2024
…………………….. …………………

2
 Dedicated To

My beloved PARENTS

because of whom I am able to achieve what I have today

Especially to my MOTHER

for she has suffered a lot for us and made me who I am today.

Also this paper has been made possible

due to endless and massive support from my family.

I would like to thank each and every member for what they have done for me.

3
 ACKNOWLEDGEMENT

I would first like to thank Allah Almighty for His countless blessings upon me and for making

me able to do this work. Then I would like to pay gratitude to my respected Professor Dr. Noor

Fatima for her kind supervision, proper guidance, valuable and expert suggestions throughout

the research work. I would also like to acknowledge International Islamic University and

faculty of International Relations department for the provision of wide range of knowledge and

valuable content from which I was able to extract out this piece of research.

Above all, I must express my profound gratitude towards my Parents and my siblings without

whom none of this would have ever been possible. They suffered alongside me and stood

beside me throughout this whole journey providing me with their endless and sincere support.

I especially would like to thank my Mother whom had guided me and provided me with

immense emotional support, and above all believed in me. I would like to acknowledge the

endless prayers of my beloved Father that made everything easy for me.

Last but not least, I would like to acknowledge the efforts and time of my friends that they put

on me and which helped me a lot in making this dream a reality.

4
 Abstract
This research paper delves into the shifting realignments of global power structures within the
framework of the New World Order, focusing on the diplomatic coalition of BRICS and its
potential threat for the U.S. dollar dominance. The global transformation arise from three major
crises the 2008 financial crisis, the Covid-19 crisis, and most recently the energy and
commodity challenges in the aftermath of Russia-Ukrain war. These events led to a shared
conviction thatthe form of monetary framework, pursued over the past decade is no longer
sustainable. Consequently, a paradigm shift is underway, leading towards multolateralism
through the emergence of three major hubs of globalisation. One controlled by the U.S. and
North America. Western Europe is the second and Asia, dominated by China is third in the
row. Therefore, it became very crucial for the global south to redefine their positions in this
new geo-economic map either as a satellite or a strategic partner to the rest of the global
economy. Traditonally, future of the International system is perceived through two
assumptions: first, that emerging powers would integrate themselves into the existing global
governance framework, and second, U.S. led institutions would be would remain dominant.
However, the BRICS nations, have been forming revisionist alliances and establishing new
institutions, challenging the dominant role of the U.S. in global affairs. The research is
structured as follows: The initial section introduces the BRICS and The Existing Monitory
Framework. Subsequent sections delve into the analytical framework in the context of
pathways for BRICS towards de-dollarization, the evolution of BRICS, possible challenges for
BRICS towards de-dollarization, its impact on the status quo, and the US response. The
concluding part summarizes key insights and provides recommendations for future
possibilities.

Keywords:

De-dollarization, Globalization, Multilateralism, Authoritarian nexus, Global governance,

paradigm shift, geo-politics, geo-economics.

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 TABLE CONTENTS

Contents
Abstract ...................................................................................................................................... 5
CHAPTER 1: INTRODUCTION ............................................................................................... 8
1.1. Statement of Problem: .............................................................................................................9
1.2. Objectives Of Study:................................................................................................................9
1.3. Research questions: ...............................................................................................................10
1.4. Rationale of the study ............................................................................................................10
1.5. Significance of the study .......................................................................................................10
1.6. Limitations of the Study ........................................................................................................11
1.7. Literature Review: .................................................................................................................11
1.8. Research gap ..........................................................................................................................14
1.9. Theoretical Framework ..........................................................................................................16
1.10. Methodology .........................................................................................................................16
CHAPTER 2: HISTORICAL BACKGROUND ...............................................................................18
2.1. Pre-World War II era ..............................................................................................................18
2.2. Bretton Woods Agreement (1944)… ..........................................................................................18
2.2.1. Post-World War II ................................................................................................................19
2.2.2. Dollar Pegged to Gold .........................................................................................................19
2.3. Rise of the Dollar ...................................................................................................................19
2.3.1. Post-War Economic Boom.....................................................................................................19
2.3.2. Cold War and Military Spending .......................................................................................20
2.4. Collapse of Bretton Woods (1971) .............................................................................................20
2.4.1. Nixon Shock ........................................................................................................................20
2.4.2. Petrodollar System ...............................................................................................................20
2.5. The end of the 1970s and the Volcker shock .............................................................................21
2.6. The stability of the 1980s ...........................................................................................................21
2.7. The introduction of the euro .......................................................................................................22
2.8. The 2008 Financial Crisis and its consequences .......................................................................22
2.9. Collapse of the International Monetary Order ...........................................................................22
2.10. Realignment of monetary landscape ........................................................................................23
2.11. Unified BRICS Currency? .......................................................................................................24
CHAPTER 3:BRICS A DE-DOLLARIZATION COALITION .....................................................25
3.1. BRICS’ Multipolar aspirations ...................................................................................................26
3.1.1. New International Order ......................................................................................................27
3.1.2. BRICS and U.S. Foreign Policy ..........................................................................................28
3.2. BRICS Expansion .......................................................................................................................28

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 3.2.1 The Inclusion of MENA nations: ..........................................................................................29
3.3. BRICS Members’ Perspectives on De-dollarization ..................................................................31
3.3.1 China ....................................................................................................................................31
3.3.2. Russia ...................................................................................................................................31
3.3.3. Brazil....................................................................................................................................32
3.3.4. India .....................................................................................................................................33
3.3.5. South Africa .........................................................................................................................34
3.4. Key Milestones in BRICS' Financial Coalition Evolution .........................................................35
3.4.1. Establishment of NDB and CRA ........................................................................................35
3.4.2. BRICS Economic Partnership .............................................................................................36
3.4.3. Alternative payment system development ...........................................................................36
3.4.4. Role of BRICS New Development Bank ............................................................................36
3.4.5. Economic influence and prospects ......................................................................................37
3.5. International response to de-dollarization ..................................................................................37
CHAPTER 4: PATHWAYS TO DE-DOLLARIZATION ................................................................38
4.1. Self-reliant Approach ..................................................................................................................39
4.1.1. NDB De-dollarizing Development Finance .......................................................................40
4.1.2. The Yuan Oil and Global Oil Trade ....................................................................................42
4.1.3. BRICS Alternatives to SWIFT ............................................................................................45
4.1.4. “China-Russia Plus” Coalition ............................................................................................48
4.1.5. BRICS Digital Currency ......................................................................................................48
4.1.6. BRICS Plus ..........................................................................................................................51
4.2. “Systemic Revision” Strategy....................................................................................................53
4.2.1. Self-Defense Against the Dollar ..........................................................................................54
4.2.2. Reforming the Global Reserve Currency Structure .............................................................56
4.3.3. Diffusing the Dollar’s Dominance in Trade.........................................................................56
CHAPTER 5:U.S. RESPONSE TO BRICS MOBILIZATION.......................................................59
5.1. The BRICS from a U.S. Perspective: .........................................................................................59
5.2. The Question of a U.S. Response to the BRICS.........................................................................60
5.3. Decline in U.S. Leadership ....................................................................................................61
CHAPTER 6:CONCLUSION ............................................................................................................63
Key Findings ......................................................................................................................................65

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 CHAPTER 1:

INTRODUCTION

The US global leadership has become a contested subject because of the global transformation

that transpired from three major crises, namely the 2008 financial crisis, the COVID-19

pandemic, and the energy and commodity challenges stemming from the Russia-Ukraine

conflict. The fact that the 2008 financial crisis arose from the US, raised concerns regarding

US leadership’s credibility and Dollar hegemonic status. It is imperative to grasp the role of

emerging powers. In view of the above significant contexts a collective belief has emerged that

the existing structure of globalization pursued by key players like the U.S., China, and Europe,

is unsustainable. As a result, a paradigm shift is unfolding, driving the emergence of three

dominant hubs of globalization. First, The U.S. and North America, for example, are reclaiming

technologies and fostering self-reliance in areas such as food and energy.

The Western European countries are the second, while Asia, led by China, takes the third

position. Thus, it became very crucial for the rest of the world specifically, the Middle East and

Africa to redefine their roles in this new geo-political and geo-economic landscape. They must

decide whether to remain a satellite to a dominant group of nations or to reposition themselves

to become a strategic partner with the rest of the global economy. The three major hubs have

distinct approaches to engaging with the global south and the Middle East. From the

perspective of Gulf states, China's approach stands out as particularly appealing. It focuses

on complementarities of strategies on a comprehensive set of issues like offering mega

projects and establishing partnerships based on equal terms as opposed to the hierarchical

policy perused by Washington. China and Russia are collectively persuing new world order

through the BRICS system. The emerging Monetary framework through BRICS provides a

platform for monetary alliance to the revisionist states that are willing to strategically reorient

their economies. Such an alliance can trigger de-dollarization mechanism.

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1.1. Statement of Problem

The US dollar, formerly a gold-backed currency, has overwhelmingly dominated the global

financial system since the Bretton woods agreement. The Bretton Woods agreement

established a robust system ofdollar-based payments. The US dollar became the standard to

which all other currencies were pegged. Despite the dominance of the US dollar, it has been

used as an instrument for weaponization. The US dollar’s strength has given the United States

government a leverage to exercise its monopoly over many monetary policies. From imposing

sanctions to increasing duty and interest rates. Therefore, the Dollar's strength and position

have been significant to American global leadership. With the emergence of geoeconomic

paradigm, the emerging economies, specifically authoritarian are increasingly doing efforts

to persue financial autonomy, ultimately resisting US monetary leadership. In view of the

following facts many researchers have studied the consequences of BRICS mobilisation. The

potential pathways through which BRICS can mobilise the existing economic order remain an

understudied area. Therefore, the main aim of this study is to focus on the ways through which

BRICS can challenge the dollar hegemony.

1.2. Objectives Of Study

Following are the objectives to be achieved by this research:

1. To eleborate the ways emerging economies are collectively challenging the US

hegemony over Monetary system through BRICS and its financial policies.

2. To analyze the evolution and expansion of BRICS and the role of member countries to

challenge the status-quo.

3. To explore the potential pathways for BRICS mobilisation.

4. To determine the U.S. Foreign policy towards BRICS efforts.

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1.3. Research questions

This research contributions is broadly categorised into following main themes (major goals):

1. Examining BRICS Mobilization:Are BRICS creating a parallel global order, capable

of challenging the dominant role of the U.S. in global financial system?

2. What can be the possible pathways to BRICS Collective De-dollarization?

3. Question of the U.S. response to the BRICS: examining If U.S. global leadership

sustainable

1.4. Rationale of the study

The purpose of the study is to explain the phenomena of de-dollarisation taking over monetary

system and how it poses threat for U.S. and its influence on dollars position as hegemon. Also

this piece of work evaluates the strategies and tactics BRICS economies are utilizing to boost

this threat and the response of U.S. and insights into future prospects.

1.5. Significance of the study

The research will help in finding clues for the BRICS de-dollarisation efforts, how is it going

to impact world order and stability. As BRICS multipolar aspirations can rise the chance of

providing an alternative world order. The study will help in understanding different lenses and

realities through which people judge this policy. Also, provide the analytical framework for

BRICS dedollarization strategies. It is a guide to those working on prospects and challenges

for the U.S. and build a solid foundation on the De-dollarization process triggered by BRICS.

It helps to answer “De-dollarization: myth or reality? and provide analytical insights for status-

quo towards countering threats from BRICS mobilisation.

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1.6. Limitations of the Study

This study has some limitations that need to be considered. Firstly, this study relies on publicly

available data, and there may be some limitations in accessing confidential information that

could provide a more in-depth understanding of BRICS monetary policy. Secondly, the study

will not explore the monetary policies of other countries, which could provide a comparative

analysis and a broader understanding of the global financial infrastructure.

1.7. Literature Review

A primary area of focus for contemporary scholarship on global monetary system has been the

establishment of the US dollar as the world’s dominant currency (both as the most frequently

held reserve currency and as the most predominantly utilized currency for international

transactions), and its implications for US global leadership. In the context of the dollar’s

international currency status, researchers have thoroughly examined the US dollar’s currency

power. The global financial crisis activated scholarly research on the US dollar positioning in

the international market and in relation to US global leadership. Researchers have tried to

investigate the role of US dollar’s Internationalization in sustaining American hegemony; how

the dominant dollar’s position acts as a source of US prestige; and how the presence of US

dollar in monetary arena has helped United States in fortifying its global influence (Steiner,

2014). For Some scholars, the absence of institutionalized currency cooperation served as the

root cause of global economic imbalance and the 2007–2008 global financial crisis. (Liu, 2014;

Que and Li, 2014). Hence, a proposed postcrisis solution for surplus liquidity because of the

decreased interest rates was to eliminate reliance on the US dollar by establishing a

multicurrency global reserves system. (Xiang, 2014).

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Creation of a dominant currency or the transition from one to another did not rely historically

on coordinated or individual state initiatives . The guilder's place as the principal reserve

currency was lost due to the market's persistent lack of trust in the Bank of Amsterdam, which

was facing policy bankruptcy rather than Bank of England's interference. Guilder lost its

positionas the medium of exchange in Europe because of policy bankruptcy in Bank of

Ameterdam (Stella and Lönnberg, 2004; Quinna and Roberds, 2017). In a similar way, the US

administration did not mandate this imposition on other states when the US dollar was formally

recognised as the world's reserve currency at the Bretton Woods Conference (Eichengreen and

Flandreau, 2008).

The economic stagnation is evident in Japan’s economic infrastructure throughout the 1990s,

therefore its struggle to globalise the yen through a variety of structural reforms—including a

foreign exchange market formation and Japan’s overseas assistance expansion—were

ineffective (Wu and Wu, 2014).

To determine US dollar dominance other rapidly surfacing foreign currencies have been

compared to the US dollar. Currency hegemony adherent to the dollar may face competition

from other developing currencies in international financial affairs. Among these are the euro

and the renminbi. However the inherent weaknesses of these currencies have make their

chances very limited to gain an emerging dominant status. Euro being the second most

emerging currency in the world has limited ability to challenge the dollar's hegemony in

international financial markets . It has had a constant position for the last two decades because

of the restricted international capital movement, inferior size, and greater complexity of the

euro-based asset financing market compared to the dollar-denominated sector. Many scholars

are still of the opinion that the US dollar is still the most valuable currency in the world and

that no other currency has seriously threatened its hegemony. (Helleiner and Kirshner, 2009;

Eichengreen, 2012). The BRICS' collective de-dollarization efforts are not taken into account

12
sufficiently in previous research, given the lack of historical precedent for an emerging power

de-dollarization coalition.

Some academics showed skepticism BRICS' capacity to trogger the paradigm shift, through

evolving into a potent anti-Western alliance capable of undermining US leadership. (e.g.,

Luckhurst, 2013). They draw attention to the fact that the absence of a single, coherent ,

inclusive vision for the global order that can be shared with the international community and

the diversity in political, economic, and ideological backgrounds undermine BRICS' efforts

and ultimately lead to power imbalance (Nuruzziman, 2022)

Researchers have analysed dedollarization efforts of nations impacted by US sanctions and

their tendency to affect monetary statecraft and US foreign policy. The reknown scholars have

denied that individual de-dollarization initiatives can have long-term impact on the US dollar's

dominance and on the global currency system, despite acknowledging that there exist a shared

incentive among countries under US sanctions to eliminate the use of the US dollar in

international transactions (Mathew and Selden, 2018; McDowell, 2020; Andermo and Kragh,

2021).

There exists a limited investigation on coalitional de-dollarization efforts driven by

organisation like the BRICS, in the existing literature despite the growing politico-economic

debates around de-dollarization. Filling in this void in the current body of literature has

implications for academic research as well as practical policy. BRICS de-dollarization

challenges to US global financial hegemony may go unnoticed by US policymakers if they fail

to grasp the concept of rising de-dollarization blocks (Pandit, 2018)

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1.8. Research gap

The primary area of focus for the existing scholarship in contemporary international relations

is the confrontation between the emerging revisionist coalitions and the status quo. Within this

framework, emerging powers seeks to enhance their say in International arena specifically in

terms of global governance. The existing knowledge on the coalition concept is limited to

security-centric context. Recent studies indicate emerging nations forming flexible coalitions

rather than security-oriented ones, and since they have been efficiently integrated as

responsible stakeholders into the current economic and financial system, it is unlikely that they

will prefer security based military alliances to oppose US hegemony.(Han and Paul, 2020;

Clayton, 2014).

It is very important to understand the goals and characteristics of emerging powers, such as to

indicate if they are reasonable revisionists, radicals, counterrevolutionaries, reform-oriented

status quo powers, or reformers. The existing global institutions are likely to confront problems

in contested areas where their views differ from the incumbent power; in such areas, stated will

be forced to establish new autonomous organisations. (Stephen and Parízek, 2019; Henning,

2017)

Growing power alliances may use the mechanism where Markets and Institutions are its two

domains of operation, either by forming new, competing structures or by amending the existing

one (Katada, Roberts, and Armijo, 2017; Kruck and Zangl, 2020). Researchers have thoroughly

studied the possibility of operating inside or outside the system, nevertheless, they have not

considered the probability of a rising power coalition challenging the dollar hegemony.

The primary focus of research by prior scholars have been the challenges posed to dominance

by rising powers. For instance; the new institutional formation or the reparation of pre-existing

14
ones. The Asian Infrastructure Investment Bank (AIIB), constructed by China is a symbol of

rising nations' counter-hegemonic institutionalism that shows dissatisfaction with United States

controled global institutions (Ikenberry and Nexon, 2019).

These studies fail to conduct a thorough assessment of the mechanisms required to create a

coalition for collective de-dollarization. As a result, existing research frequently undervalues

the intricacy of financial coalitions between emerging countries, which could lead to errors on

the effectiveness and legitimacy of these alliances. Initial studies on BRICS' have questioned

the BRICS’ capacity to eliminate, let alone lessen the "exorbitant privilege" of the US dollar.

Most of the available data has focused on the New Development Bank (NDB) and the

Contingent Reserve Arrangement (CRA) commitment towards BRICS' financial cooperation,

only a few have specifically addressed the potential for de-dollarization through these

multilateral financial bodies (Chossudovsky, 2018; Kievich, 2018). Another literature void is

analyzing the various BRICS member's de-dollarization initiatives and a systematic

examination of BRICS' "coalitional de-dollarization" and their cooperation with non-BRICS

entities to amplify their de-dollarization efforts ( China, 2020)

There have been very limited studies which focused on the possibility of de-dollarization

through these BRICS-led multilateral organisations, despite the fact that earlier research has

focused on BRICS' financial cooperation through organisations like the NDB and the CRA

(Chossudovsky, 2018; Kievich, 2018). The readily accessible data indicates that the variety of

de-dollarization initiatives undertaken by BRICS members has not been examined carefully,

nor has it rigorously examined the pathways towards de-dollarization that BRICS states can

follow. Moreover, there hasn't been a detailed methodological analysis of how BRICS

collaborates with non-BRICS states, organizations, and entities to pursue its de-dollarization

aspirations (CRA, 2022)

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1.9. Theoretical Framework

In the case of BRICS, Power Transition Theory best explain the BRICS monetary efforts to

reshape the global economic landscape. The BRICS coalition is doing efforts to counter the

dominance of the US dollar through transitioning away from dollar-centric financial system to

a more balanced, multipolar structure.

The emergence of the BRICS as a coalitional force is based on the discontent of emerging

economies that have suffered from US sanctions. These shared incentives among developing

economies like China, Russia, and Brazil have led to the formation of the anti-dollar alliance.

The BRICS have encouraged multipolar strategy to tackle the dependence on US dollar.

Alternatively, the BRICS can take a defensive posture in an effort to boost the member state’s

currency flow and BRICS common currency. In order to offset the influence of the the United

States, BRICS have also engage in competition by strengthening its partnerships and alliances

beyond the group. The BRICS coalition’s challenge is evident through various economic

measures, trade policies and establishment of new institutions. Monetary posturing and

economic alliances of mutual interest serves as tools to manage geopolitical competition. For

the U.S. The challenge lies in developing a flexible and adaptive strategy that recognizes the

changing global landscape while safeguarding core U.S. interests and values.

1.10. Methodology

In order to investigate the de-dollarization routes of the BRICS countries and their potential to

de-dollarize the global financial system, we employed qualitative techniques such as content

analysis, archival research, and quantitative analysis of financial data pertinent to the BRICS

countries. A combination of process tracing and content analysis have been employed to

determine the major turning points in the financial cooperation and de-dollarization efforts of

the BRICS countries from the period of 2009 to 2024. We have collected data using multiple

16
reliable regional sources in the BRICS nations to global media. Second, we examine a range

of historical sources, such as BRICS declarations and articles by BRICS policymakers, BRICS

think tank reports, NDB funding operations and press releases, and reports from the BRICS

Business Council, in order to assess the consistency of BRICS' commitment to dedollarization

over time. Third, we have sourced semi-structured interviews of experts, officials (former and

current), central bankers, and financial professionals in the BRICS policy framework.

17
 CHAPTER 2:

HISTORICAL BACKGROUND

The global world order, historically has rested on two fundamental tenets: first, that newly

emerging nations would easily incorporate themselves into the current global governance

structure; and second, that the institutions led by the the United States would continue to be the

dominant ones. However, the emergence of BRICS has led some scholars to suggest that the

BRICS coalition and its efforts to create new robust institutions and revisionist alliances can

prove a vital challenge for the existing dominant currency by creating a rival system.

We must first analyze the historical background of the dollar, how it emerged as a currency,

and its evolution that led to its prominence as the most dominant global reserve currency. The

British pound has retained as the benchmark and the dominant global reserve currency for all

international trade and monetary statecraft for more than a century under the British Empire.

However, during World War II the United States transitioned into the only capitalist

superpower, forged the Bretton Woods Agreement, and established a new global financial

framework.

2.1. Pre-World War II era

2.1.1. Gold Standard

Many nations, including the US, followed the gold standard before World War I, which fixed

currency values to specified gold reserves. By facilitating a steady exchange rate, this system

ensured global investment and trade (Economic Times, 2000)

2.2. Bretton Woods Agreement (1944)

The U.S. dollar system emerged after the Bretton Woods on three pillars: U.S. military

superiority, U.S. financial supremacy, and U.S. economic prowess. It was an agreement that

18
facilitated the formation of a collective currency exchange system. Under this agreement, gold

was linked to the U.S. dollar, and other currencies gained value by being pegged to the U.S.

dollar. (Pandit, 1999)

2.2.1. Post-World War II

In 1944, almost 700 delegates from 44 nations led a meeting at the Mount Washington Hotel

in Bretton Woods, New Hampshire. The US, Canada, Australia, Japan, and some European

powers were the prominent delegates. One year before the end of the war, they framed a new

global monetary structure. It was the first and only monetary system shaped by international

treaties. It was the Bretton Woods Agreement that gave way to new International

Bureaucracies; the International Monetary Fund (IMF) and the World Bank (WB)

(Antonidassi, 2000)

2.2.2. Dollar Pegged to Gold

Other currencies were tied to the dollar, and the value of the US dollar was decided to be fixed

at $35 per ounce of gold. As a result, the dollar became the foundational reserve currency of

the globe and became essential to global finance. The Bretton Woods Agreement (BW) gave

the US dollar, the status of a reserve currency, and US government treasuries were selected as

reserve assets. This agreement cemented that The US dollar will play the role of gold in the

world market (World Bank, 2020)

2.3. Rise of the Dollar

2.3.1. Post-War Economic Boom

Europe and Asia were in extreme recession after World War II, the United States on the other

hand, had a thriving economy. The U.S. even initiated the Marshall Plan to stabilize and

19
reconstruct the affected economies specifically, in Eastern Europe. The successful renovation

of Europe led to the first negative trade balance in 1950. Although the Bretton Wood system

was running as intended, some systemic issues persisted. (IMF, 2000)

2.3.2. Cold War and Military Spending

In the post-World War II era, Europe’s economy shrank to a greater extent. The national

reserves were depleted. Then the Cold War era further exacerbated demands for US goods

abroad due to its rigid and coherent markets and industrial base. US substantial military

spending and foreign aid rose, hence, there is a notable US trade surplus and a remarkable U.S.

dollar shortage in Europe. (Luft, 1999)

2.4. Collapse of Bretton Woods (1971)

2.4.1. Nixon Shock

After 25 years, US President Richard Nixon ended the phenomenon of fixed exchange rate by

terminating the Bretton Woods monetary arrangement on August 15, 1971. He diminished the

process of U.S. dollar pegging to Gold. The oil shock rates of inflation rose significantly in the

1970s. In the Arab world, prices are rising and crises are emerging. The phenomenon of oil

shortage was experienced by the Western world for the first time. A major operating event in

U.S.-China relations was the visit by U.S. President Richard Nixon in 1972. This move, known

as the "Nixon Shock," led to floating exchange rates, where currencies' values were determined

by market forces. (Ronald, 1973)

2.4.2. Petrodollar System

William Simon, the U.S. Treasury Secretary, cemented a significant development in U.S.

history through his visit to Saudi Arabia in July 1974 and ended the U.S. first oil crisis. Saudi

Arabia consented to convert its petrodollars into US Treasury bonds in exchange for military

alliance and security backing. This was a smart move Because countries needed dollars to buy

20
oil, this arrangement served to maintain the dollar's dominance by ensuring that there would

always be a market for American money. This gave birth to the petrodollar. The US dollar is

now backed by "black gold" rather than gold. This made it a prerequisite for all countries to

hold large reserves of the US currency for paying energy and oil bills (Friedman, 2020)

2.5. The end of the 1970s and the Volcker shock

The Jamaica Accords of 1976 marks the official demise of the Bretton Woods system. For the

first time in history, the world is officially on a paper money standard except Switzerland,

which maintained the franc currency pegged to gold until 1999. The US dollar is facing extreme

pressure due to the high inflation rate. Volcker was successful in shifting the Federal Reserve's

strategy, but the U.S. annual inflation reached 14% in 1979. The price of gold was expected to

peak in the upcoming year at over USD 850. Short-term interest rates would peak at almost

20% at the start of 1981. Volcker was successful in curbing inflation but at the cost of sending

the US economy into recession. (Michael Moffitt: World's Money, 1983, page 196)

2.6. The stability of the 1980s

There were attempts to stabilize the monetary system in the 1980s. To gain freedom from U.S.

dependence, European nations started creating their currencies. Debates arose on the unified

currency of the European Union. It was named "euro" in December 1995, and it became

functional on January 1, 1999. (Laynee, 2000) The euro was not tied to gold under Bretton

Woods in contrast to the US currency. In the Eurosystem, gold was used for quarterly market

value adjustment as a separate asset. This strategy provided actual gold to EU citizens as a

safety net and strengthened the Euro’s position in the world market. At one point the euro was

intended to be used as an energy reserve currency. Despite dissatisfaction from the US, Iraqi

President Saddam Hussein decided to shift the currency used for oil trade from US dollars to

euros in November 2000. The decision proved to pay off economically by February 2003, when

21
the value of the euro increased. But with the invasion of Iraq from the U.S. in 2003, regime

change overthrowing Saddam and reversed the oil trade back to the U.S. dollar. These situations

reverse Euros’ progress towards dominance and sustain the Dollar's hegemony (TASS, 2005)

2.7. The introduction of the euro

The member nations of the European Union (EU) decided to introduce a common currency

name in December 1995: the euro. On January 1, 1999, the euro became officially functional.

It is marked as a milestone towards the unification of European currencies. The creation of the

euro was meant to act as a potential reserve energy currency in addition to a unified currency.

The EU politicians never concealed this motivation. (EU, 2000)

[Link] 2008 Financial Crisis and its consequences

The Global Financial Crisis (GFC) or the 2008 financial crisis, was a serious financial

catastrophe that was started in the latter part of the 2000s. (1929). Following the Global

Financial Crisis and the bankruptcy of Lehman Brothers, triggered political debates revolving

around the diminishing the U.S. dollar system. Lehman Brothers' bankruptcy further

hightened the frusration, causing peak credit constraint and recession in the world economy.

The global financial crisis also bolstered the U.S. dollar's position as the supreme reserve

currency in the world (World times, 2000, pp. 6, 14).

Collapse of the International Monetary Order

A major recalibration in the global currency architecture was the freezing of Russia's currency

reserves by western nations, making it clear that active hostility to the US dollar's hegemony

was emerging. Not only are South America, Africa, Southeast Asia, and Europe exhibiting this

oppositional, but so are Russia and China. The Russian stock exchange has adopted the Chinese

yuan as a reserve and trading currency, replacing the dollar and euro. Russian banks are also

22
providing high-interest yuan accounts. Ghana declares its intention to replace US dollars with

gold to pay for oil. During a meeting with officials of Gulf oil states, Chinese President Xi

Jinping talked about the trade of yuan oil and pledged to establish a new paradigm for

cooperation between China and the oil-producing Middle Eastern states. Saudi Arabia makes

it clear that it plans to trade oil for currencies other than the US dollar, notably the euro. Brazil

and Argentina start preparing for a monetary union. Kenya agreed to sign a dea to buy oil in

Saudi Arabia and the United Arab Emirates with Kenyan shillings. Reducing reliance on the

US dollar, euro, yen, and British pound is a topic of discussion among ASEAN finance

ministers and central bank governors. Indonesia is pleading with banks to cease offering

Western credit cards. President Emmanuel Macron of France is an advocate of a dollar

substitute and "strategic autonomy" for Europe. Brazil's President Lula criticizes the world's

dependence on the dollar in China, arguing why it should be connected to trade. These

developments signify a shift towards a larger trend away from the U.S. dollar's hegemony and

towards a more diverse global currency market (Layne, 2012)

[Link] of monetary landscape

The reshaping of economic paradigm is evident through structural reorientation of global

powers. Given the rise of globalisation, strategic shift in monetary environment , and China's

integration in the global market and its portrayal as a responsible stakeholder. As a result of a

significant crisis, emerging nations have had the chance to push for more representation in

international governance. The US's two biggest adversaries __China and Russia__ have long

contested American hegemony, and BRICS offers them the ideal platform to do so. The BRICS

nations have pushed one another to trade in their own money and break free from the dollar

trap. (Mathews and Seldon, 2018)

President Dmitry Medvedev of Russia hosted the BRIC inaugural summit in Yekaterinburg in

2009. Their primary motivation of shared identity as developing economies, acted as a catalyst

23
in hosting a meeting of the BRIC Foreign Ministers in 2010 in New York. South Africa was

given membership in BRIC and there after the group was rename as BRICS. South Africa

joined the 2011 BRICS Third Summit in Sanya as a member because of this (Luft, 2018)

The BRICS is a cohesive alliance that has underwent considerable financial cooperation . There

has been significant ongoing discussion over the successful outcomes of the BRICS'

dedollarization initiatives. NDB's initiative to use local currency rather than solely relying on

US dollars initiated BRICS dedollarization efforts. China and Russia are the prominent players

in this rapid dedollarization initiatives. However, it’s unclear if these efforts are in response to

their discontent with the US leadership (Pandit, 2019)

2.10. Unified BRICS Currency?

A major area of focus is a unified BRICS currency. There was no official nnouncement during

the 2023 BRICS meeting in South Africa that revealed the formation of a new BRICS currency,

but the debates ave been ongoing on several BRICS forums. Since each member has their

individual currency, it would be far more In an interview, Russian diplomat Yury Ushakov

provided distinctive perspective on the BRICS currency. He delivered the idea of BRICS Pay,

a blockchain-based payment system. In a nutshell, it's a cryptocurrency that operates through

digital means instead of paper money. Theoretically, the fact that the BRICS countries—

especially China—have been buying more gold raises concerns about BRICS Pay potentially

being a currency backed by gold (Radulescu, Panait, and Voica, 2014)

24
 CHAPTER 3:

BRICS A DE-DOLLARIZATION COALITION

For two key reasons, it is interesting that BRICS is still little-known as a de-dollarization

cooperation. Firstly, there should be a collective motivation for the BRICS nations to de-

dollarize their foreign operations in order to reduce currency and sanction risks, given the

combined size of their economies and markets and the associated risk penalties. All five of the

members have previously been subject to US sanctions, which are still in place to varying

degrees for China and Russia. These countries' shared dissatisfaction put them in the direction

of dedollarization. Second, when BRIC originally came together in 2009, one of its openly

declared objectives was to lessen dependency on the US dollar and move the world towards

multilateralism through diversifying the monetary system. (Hopewell, 2010)

Examining the de-dollarization initiatives of the BRICS, the rising economies committed to

introduce a multilateral financial governance, offers a unique opportunity to further research

on the political economy of de-dollarization within coalitions. There also exist a Dilemma for

the BRICS states, most of their assets are in U.S. dollar. They are seeking for alternatives to

the U.S. dollar as the world's reserve currency but the dollar's decline would reduce the value

of their dollar-denominated assets making them even more vulnerable to U.S. leadership.

They must therefore seek cost and benefit analysis by weighing the monetary costs of

undermining the dollar's hegemony against their desire for increased financial independence

and international [Link] dollar the dollar's decline would reduce the value of their

significant dollar-denominated assets. In addition to being vital for the BRICS, this delicate

balancing act has important policy ramifications for other countries and regional organisations.

The de-dollarization of BRICS will have a major influence on the US dollar's supremacy in the

25
existing global financial system and US global leadership, given the importance of BRICS in

politics and the economy (China, 2014)

It is crucial to make clear that de-dollarization in this context should not be mistaken with

replacing the US dollar with another widely used global currency when describing this research

topic. The goal of BRICS' de-dollarization initiatives is not to support the internationalisation

of the yuan or any other national currency collectively. This study aims to identify the

procedures that the five members of the coalition have implemented to lessen their reliance on

the US dollar, with a particular focus on the coalition's de-dollarization efforts. Moreover,

rather than focusing on internal monetary de-dollarization, this study emphasizes de-

dollarization in the area of international settlements (Armijo, 2017)

The hypothesis that the is examined in this section. It examines how BRICS has used process

tracing and content analysis to address the diversification of the global financial system

centered on the US dollar since its inception in 2009 (Roberts et al., 2017). The first part of the

analysis looks at the BRICS's multipolar goals, the importance of their currencies in global

markets, and how they interact with the dollar's hegemony. Subsequently, it delves into the

perspectives of all five BRICS countries about de-dollarization, finds advocates and their

strategies, and examines the mobilisation process surrounding this issue.

3.1. BRICS’ Multipolar aspirations

The emerging BRICS powers are motivated by the pursuit of multipolarity. To U.S.

policymakers, interpreting these new countries' ambitions means decoding their approaches,

and interpreting its effects on the U.S. and the world at large. The emerging countries'

aspirations, and potential for harmony and cooperation shifts over time. The BRICS countries

stand in harmony because of shared desire of members to seek multipolarity, regardless of the

individual goals of each—China has historical rejuvenation, Russia seeks to retake a key

position in the world economy, India and Brazil are motivated to get autonomy and

26
representation in the UN Security Council, etc. The emphasis on a transition in power from the

Northern to the Southern hemisphere is also seen in South Africa. There exists a shared goal

of creating a global order with several power centres, this is what unites the BRICS.

Notwithstanding their complexities and differences, there is no contradiction among BRICS

nations when it comes to opposing a unipolar system in which the US is the sole and supreme

power running global standards, undergoes interventions everywhere, and pursues stability all

by itself. (Paradigm shift, 2022)

3.1.1. New International Order

The Russian-Chinese Joint Declaration on a Multipolarilty and the idea of a New International

Order both display the BRICS perspective on multipolarity. Both countries advocated for the

"multipolarization of the world" and reoriented themselves as revisionist leaders of a new

international order free from the clutches of power politics, monopolistic capitalism and

hegemonic design in international affairs. The India-Brazil-South Africa Dialogue Forum

(IBSA), which was established in 2003, displays this idea, represening new international

framework. (Journal Tocks, 2005)

The original motivation of the BRIC (which later imbedded South Africa) were to create a

democratic and just multipolar order based on values like cooperation, equality, following the

international norms and international law. (BEWG, 2022)

Collective decision-making is evident among all members in achieving the goals. The BRICS

leadership however, has now evolved through progressive ideologies. The BRICS evolution is

evident in the growing progressive cooperation, institutional development, meetings and

private-enterprise collaborations. Policy formation has bolstered interdependence in successful

evolution of BRICS (Durkheim, 2018)

Surprisingly, only little has done in examining how the BRICS' actions are seen in the US as

they are motivated to shape a multipolar world. Of course, one aspect of BRICS mobilisation

27
is taking on perceived US hegemony. The group efforts to broaden the diversity of international

organisation and to replace the dollar monetary hegemony. Present efforts, such as the

establishment of a separate digital currency, draw attention towards the alarming scenario

associated with the BRICS' mobilisation for American foreign policy. This influences the

broader U.S. policy of the international system (Xinhua, 2019)

3.1.2. BRICS and U.S. Foreign Policy

Although it is clear that the BRICS seek leadership , it is vital to understand how a group is

portrayed in U.S. policy talks. This section studies the BRICS' pursuit of a multipolar global

order from the American viewpoint. It looks at how and whether the BRICS are debated in

leading United States academia, think tanks and policy making bodies. The objective is to

identify the aspirations, goals and the mechanisms they utilized to incorporate the BRICS into

the policy discourse in the United Statesamd to shape a more extensive discussion on

(counter)mobilization in this regard. (Durkheim, 2020)

The results indicate that, different U.S. constituents often overlook the BRICS because they

believe it to be ineffective in terms of output and prospective contributions to global public

goods. The U.S. lacks the cohesive strategy against BRICS in official foreign policymaking.

Nonetheless, it is imperative to recognise the role of the BRICS for the formulation of US

foreign policy. The group triggered the foreign policy makers to construct a cogent U.S.

response to multipolarity, changing the predominant narrative of the discussion: from bilateral

China_U.S. Geopolitical tustle to multilateral mechanisms challenging the existing structures

of international relations. (International Times, 2021)

3.2. BRICS Expansion

The findings demonstrate that, even if they are acknowledged as a group, many American

citizens regularly overlook the BRICS because they think the organisation doesn’t habe the

28
capacity to provide meaningful contribution to global public goods. Despite being discussed in

elite think tanks and academia, the BRICS are still not seen as a radical monetary force im

foreign policy of the U.S.. However, it's significant to understand the BRICS' influence on US

foreign policy development. The group urges experts of Foreign policy to construct a

persuasive American response towards multilateralism, shifting the narrative from bilateral

conflict between the US and China towards multilateral scenario of international monetary

system marked by the provision of public goods. (Xinhua, 2019).

Additionally, It led to a subfield of BRICS studies. BRICS membership provides the

opportunity for expanded access to the large and rapidly growing markets of the BRICS group.

The BRICS comprises almost 45 percent of the world's population (with China and India alone

consisting of 87 percent of BRICS), 35 percent of global GDP (of which China alone accounts

for 65 percent of BRICS) and 26 percent of world trade, measured in terms of exports. The

new members are thus strengthening their role as suppliers in the energy and raw materials

sector. The significance of BRICS will expand in the future: Around 30 other countries have

showed interest in joining. (Ferdinand, 2021, Lee, 2022)

3.2.1 The Inclusion of MENA nations:

n August 2023, BRICS expanded by admitting six new members from the Middle East and

North Africa (MENA) region, including Iran, Saudi Arabia, Egypt, and the UAE. The inclusion

of MENA nations into BRICS marks a pivotal milestone as it will strengthen economic

cooperation, reducing Western influence in the region. These nations, rich in natural resources

followed by rising economies, seek increased economic autonomy from the West through their

BRICS affiliation. With China as a key player, MENA states aim to promote their national

interests through broaden economic and diplomatic cooperation. In this context, BRICS

provide a platform for rebalancing the relationships with major powers like China and Russia.

29
While many new members of BRICS still rely on the U.S. for military and logistical assistance

and security benefits, BRICS offers an alternative of networking and repatriate associations

with other major powers. Additionally, BRICS' aspirations of de-dollarization holds significant

setbacks for U.S. influence in the Middle East. The establishment of BRICS in 2009 expressed

dissatisfaction with the Western-dominated global order, providing an alternative to the G7.

BRICS' collectively exceeded the G7's global GDP share, presents an appealing alternative for

developing nations. Middle Eastern nations view BRICS as an opportunity to polarise their

economies and counter the U.S. sanctions. Saudi Arabia and the UAE, prioritizing relations

with China for economic diversification, aligning with their long-term goals of gaining benefits

from oil exports with China's growing market. (RDB, 2022)

Iran's motivation to join BRICS lies in defiance of the U.S. sanctions, with aspirations to

construct ties with an authoritarian state like China and collectively expanding global influence

and constraining the U.S. leadership. BRICS offers myriad opportunities to Iran for trade

relations, challenging potential trade sanctions given BRICS' population of nearly half the

world's population. The inclusion of MENA nations enhances BRICS' capacity to advance de-

dollarization, challenging the dollar's dominance and limiting Western economic clout in the

region. (dihauong, 2024)

The participation of MENA nations in BRICS signals a shared incentive to amplify

globalization, triggering geopolitical initiatives that constrain the established U.S.

international order. China's role in the Middle East region, coupled with economic partnerships

with MENA nations, suggests a diminishing U.S. influence in the Middle Eastern region. While

the U.S. remains a key security partner for Saudi Arabia and the UAE in defense sector, recent

developments like Chinese peace initiatives, exlanded regional relations, could contribute to a

more stable position of China in the region, further decreasing the U.S. influence. (Finn, 2024)

30
3.3. BRICS Members’ Perspectives on De-dollarization

This section will examine whether BRICS countries have shown a shared interest in de-

dollarization considering their individual official discourses.

3.3.1 China

The Asian financial crisis of 1997 served as the catalyst for China's support of initiating the

dollar-based global financial system. Following this crisis, the People's Bank of China (PBoC)

Governor at the time, Dai Xianglong, said:

“International economic development urges a different monetary system. The current structure

cannot upheld these demands. The existing international financial system must be altered as it

is unable to address the structural imbalances in payments, which has been the root cause of

global financial crises. This is due in large part to the greater ambition that a small number of

countries' national currencies have played through international reserve currencies (DI, 2021).

China is especially well-equipped and well-informed to promote dedollarization on a variety

of forums, including as the BRICS. For example, China has been expanding the renminbi's

internationalisation by establishing offshore renminbi markets and bilateral currency swaps,

especially in the context of the Belt and Road Initiative. In comparison to other BRICS

offshore, Chinese state-owned commercial banks enjoy greater influence and global reach.

Development finance from policy banks of China, like the China Development Bank, is

currently comparable to that from the World Bank (Ray and Simmons, 2020).

3.3.2. Russia

Russia is driven towards de-dollarizatiom monetary framework primarily because of its BRICS

geopolitical competition with the United States. The then-Deputy Foreign Minister Sergei

31
Ryabkov of Ruddia voiced concerns about the U.S. dollar dominance in international trade.

(Labetskaya, 2012). In 2017, President Putin supported the idea by stating that “BRICS

countries are ready to work together to overhaul international financial regulations and lessen

the power of a small number of reserve currencies”. (Nikolskaya, 2017).

In order to shield the Russian currency and economy from American sanctions, Putin

repeatedly supported the concept of dedollarization during his fourth term as president, which

began in May 2018. He described the dollar's hegemonic position "skeptical" and "dangerous"

for international trade in a parliamentary speech, calling for the removal of the dollar's power

in the world oil trade and the Russian economy (TASS, 2018). After fresh U.S. sanctions were

imposed in August 2018, talks about dedollarization ascended and resulted in pilicy debates to

replace dollars with other currencies in international transactions. (RT International, 2018;

Invesforesight, 2018)

3.3.3. Brazil

Brazil first supported the concept of BRICS as a coalition for dedollarization. Recalling how

President Obama voiced alarm over such conversations, former President Lula da Silva pushed

for the creation of a currency independent of the US dollar to avoid dependency (Escobar,

2019). Brazil's confusing relationship towards BRICS policies and a greater alignment with

Western world have resulted from political disintegration since 2014. (Ray and Simmons,

2015) Additionally, President Bolsonaro's ascent to office has amplified these issues.

Additionally, Brazil's cautious attitude in International monetary affairs is likely because of its

strong economic linkages to China and its dependency on commodity exports, which makes it

vulnerable to fluctuations in the global market. Even while it might not overtly undergo de-

dollarization activities, Brazil is willing to incorporate them in its policies. (Xinhua, 2019).

32
3.3.4. India

India took a more neutral stance, gave a measured response through strengthening the Special

Drawing Rights (SDR) offered by the IMF, instead of overtly challenging the U.S. dollar's

hegemony, when China and Russia proposed a new global super-sovereign reserve currency in

2009 (Zhou, 2008). India's neutral posture arose from its strategic alliance with the United

States, its rivalry with China,, all of which prevent it from endorsing a clear BRICS position in

overthrowing the United States [Link] Indian government has its own motivation. It did

not wanted to question the U.S. dollar or offend the US, especially at a time when the US was

pressusurizing Pakistan about counterterrorism, and instead saw this Sino-Russian plan as more

ideological than practical. (Economic Times, 2009).

India views the United States as a significant strategic partner and ally in the Indo-Pacific area,

while China and Russia are viewed as strategic competitors. India has been unable to endorse

China's motivation to replace the U.S. currency due to their competition and the recent

geopolitical tensions between them. This indicates that, within BRICS, India will not back a

clear BRICS movement to dethrown the US dollar as India is a beneficiary from the U.S.

controlled political system. India's resistance however does not indicate that it is satisfied with

the current dollar hegemonic economic system. India has introduced financial action task force,

demonstrating a strong desire to lessen its reliance on the US dollar. (Ralph and Finn, 2022)

India has also promoted the growth of BRICS financial institutions and BRICS financial

cooperation. As an example, in 2012, the Indian Finance Minister's initiated a collaborative

working group tasked with investigating the creation of a BRICS Development Bank.

Additionally, India has been aggressively pushing the rupee's external flow abroad, primarily

in reaction to the disruption of India's oil payments in US dollars caused by China's renminbi

33
internationalisation and US sanctions on Russia and Iran in 2018. (RT International, 2018;

Invesforesight, 2018)

India is working to lessen its reliance on the dollar in trade, and one major element motivating

this endeavour is the expanding volatility of exchange rates, especially with regard to the US

currency. (Gajara, 2020). India is incorporating reforms that promote the use of Indian rupees

in trade and development funding, thereby indirectly reducing dollar dependence, even though

it may not take the lead in a BRICS drive to de-dollarize.

3.3.5. South Africa

South Africa's relations with the United States improved once the majority of U.S. sanctions

were lifted by 1991 (Friedman, 1991). This helps to explain South Africa's attitude towards

dedollarization. Despite not overtly endorsing BRICS de-dollarization efforts, South Africa

upholds the initiatives of China and Russia. Politicians are well-known of the dangers

associated with the US dollar's hegemony, which is why they are pushing South Africa to back

BRICS measures that encourage the use of local currencies in trade. For example, Trade and

Industry Minister Rob Davies noted following the 2011 BRICS Summit that dealing in local

currencies might protect the BRICS nations from fluctuations in exchange rates (Brand South

Africa, 2011).

In order to eliminate currency risk, South Africa has endorsed the utilisation of the Chinese

yuan and made it its foreign exchange reserves. Renminbi payments between South Africa and

China rose by 181% between 2013 and 2015 (SWIFT, 2015). All members show shared

interest towards moving for de-dollarization for increased financial autonomy, the BRICS have

continuously sought to change the U.S. dollar-dominated global financial system. These

efforts, are inspired by geopolitical rivalry and the U.S. sanctions. The most outspoken

34
supporter was Russia, while China concentrated on broadening the system through BRICS as

a single forum of initiatives to work towards de-dollarization goals. (Ikennberry, 2016)

3.4. Key Milestones in BRICS' Financial Coalition Evolution

At the end of the first BRIC summit in 2009, leaders pledged for a more stable, diverse and

reform-oriented international monetary system to take into account developments in the world

economy (BRIC, 2009). Since then, multiple achievements have significantly boosted BRICS'

goal to diversify its financial system. BRICS campaigned for the inclusion of local currencies

and thus founded the Contingent Reserve Arrangement (CRA) and the New Development Bank

(NDB) between 2012 and 2017. Strengthening local currencies was one of the agenda goals

that the BRICS outlined in 2020 (Friedman, 1991)

3.4.1. Establishment of NDB and CRA

The first major milestone was the establishment of the NDB and CRA, proposed in 2012 and

2013 respectively, and realized in 2014. These institutions emerged from BRICS members'

frustration with their receeding economies. The NDB and CRA were constructed in alternative

to the World Bank and the IMF but under BRICS ownership and control. The NDB, in

particular, was created to reduce dependence on U.S. dollar financing and the IMF, providing

loans in local currencies to avoid increasing external U.S. dollar debt (NDB, 2014). The CRA,

was termed by President Putin as "BRICS' own IMF," comprising dollar reserves to provide

liquidity support during the balance of payment crises, playing its role as a first line of defense

before getting help from IMF. (RT, 2014).

35
3.4.2. BRICS Economic Partnership

Another milestone occurred during the period of COVID-19 pandemic at the BRICS 2020

Summit under the Russia's chairmanship, the group devised the Strategy for BRICS Economic

Partnership 2025. This strategy reaffirmed BRICS commitment to reform the Bretton Woods

institutions and pinpointed key areas related to de-dollarization. These key areas were to

enhance mutual trade supported by local financing, promote cooperation on payment systems,

developing new financial digital infrastructure, supporting the CRA, and expanding the

increase local currency flow in NDB financing. Over the past two decades, BRICS has

constantly worked to alter the global financial system and multipolarize the global currency

structure. The global financial crisis and the COVID-19 pandemic have further boosted these

efforts. Despite political and military tensions, such as the conflict between India and China,

BRICS members have continued to deepen their economic relations, indicating strong political

will to seek economic goals and prioritize de-dollarization. (Economic Times, 2021)

3.4.3. Alternative payment system development

A major step in seeking a self-reliant monetary system is the development of an alternative

payment system to SWIFT Which is currently dominated by the US dollar. This new system

aims to facilitate international trade and monetary transactions independent of U.S. financial

control, debunking the geopolitical might and leverage of the U.S (SWIFT, 2020)

3.4.4. Role of BRICS New Development Bank

Additionally, the BRICS New Development Bank is increasing its lending in the local currency

of member countries to have 30% of its loans in local tenders by 2024. This reduces reliance

on the dollar and mitigates risks associated with Exchange rates and our monetary policies.

36
3.4.5. Economic influence and prospects

The expanded bricks now include major oil-producing states like Saudi Arabia enhancing its

economic influence and Supporting the dollarization agenda by integrating More economies

capable of trading in local currencies (Nikolskaya, 2017).

3.5. International response to de-dollarization

These initiatives by BRICS Signify a concerted effort to create a more multipolar global

financial system, Challenging the hegemony of the US. Dollar while the full impact of these

matters will take time To manifest the move toward Dollarization marks say the significant

shift in the global economic paradigm the de-dollarization was not limited To the initial BRICS

move It has a broader scope. Recently china sold approximately 60 billion dollars in US bonds,

this marks a significant moveThis marks a significant move in a broader strategy Of

dollarization. This sale reflects China’s long-term goals of diversifying Its reserves and

reducing its exposure to us financial Instruments. The reduction in holding brought China’s US

tragedy reserves to a 14-year low dropping from 816 billion dollars in December 2023 to 716

billion dollars by March 2024. (RT International, 2018; Invesforesight, 2018) Several factors

drive this strategic shift. One primary factor is the ongoing political tensions between the

United States And China which have motivated China to seek financial independence from the

us. Over the years, a number of trade disputes and political difficulties have worn down these

tensions. China also wishes to defend itself against financial instruments and sanctions that

could be used against it. China is not acting alone; other nations have also decreased their

holdings of US Treasury bonds, including Japan. In the meantime, certain countries—such as

the UK and Belgium—increased their bond holdings in the US, demonstrating a mixed reaction

throughout the globe to US financial instruments in the face of shifting market conditions and

economic policies. (DI, 2022).

37
 CHAPTER 4:

PATHWAYS TO DE-DOLLARIZATION

We proposed an analytical framework, titled "Pathways to De-dollarization," outlines various

monetary and institutional avenues through which a coalition of rising powers and its

proponents can minimize the threats associated within the dollar-centric system. Rising powers

can follow two strategies to manage such risk. The first involves “hedging” by creating a non-

dollar-based alternative system that establish direct economic and financial ties with other

global nations without relying on the dollar-controlled monetaryframework. (BEWG, 2022)

This strategy, termed the "self-reliant" approach, focuses on constructing new monetary

structures and implementing de-dollarization policies beyond the dollar-dominated realm. The

second strategy considers seeking diversification by employing "voice" to bring reforms and

changes and enhance the existing dollar-based system ( RT International, 2021)

This strategy is coined as the "systemic revision" strategy, it includes devising strategies to

bring modifications within the existing system to devalue the dollar's hegemonic status.

Risk Mitigation Self-reliant approach Systemic revision

Mechanism

Establish new multilateral Enhance central banks' self-

financial institutions for nondollar sufficiency against the
financing beyond the scope of current dominance of the US dollar
existing institutions and enhance
emergency access to dollar-
based liquidity.

Institutions Reform and broaden the

Promote and popularize nondollar current structure of global
institutions through wider Involvement reserve currencies for
and participation diversification.

38
 Lessen the influence of the
Create new alternative financial dollar as the primary
instruments and assets in the market that currency for transactions and
are not based on the US dollar advocate for the use of local
Markets currencies in cross-border
dealings.
Reorganize the structure of
Create and promote alternative on-dollar the global equity market and
financia iinfrastructures for the market establish an alliance for
equity markets independent
of the dollar.
Source: The Economist (2022)

Proposition 1: Rising powers who are dissatisfied with the existing system and wants financial

autonomy in response to perceived challenges of sanctions and currency risk utilize "self-

relient" strategies by developing their own non-dollar institutions, reducing reliance on US

dollar reserves, and advocating local currencies in global trade. Alongside, they might persue

short-term "reform-the-status quo" methods, such as using non-dollar currencies and

broadening liquidity flow and trading access. This diversifies the global currency landscape,

and provide avenues to redirect capital from dollar-based markets to non-dollar-based equity

markets. (Yuang, 2022)

Proposition 2: During non-threatening periods, rising powers seek to maintain allegiance to the

US dollar, emphasizing short-term "systemic-revision" strategies. Though incorporated in the

dollar-based system ambitious rising powers intending to diversify will employ both ‘systemic

revision’ and ‘self-relient de-dollarization strategies to boost their financial and geopolitical

sway. Based on the above mentioned propositions we draw the following analysis;

4.1. Self-reliant Approach

BRICS’ “self-reliant” strategy should be studied from the lenses of both institution-building

and market-building that create critical components for an alternative non-dollar global

39
financial system. As a rising power coalition, BRICS states has created a “group-level de-

dollarization” club by establishing effectively the NDB, to de-dollarize financial structures.

BRICS has also shown a commitment to developing other new de-dollarization groups such as

a common BRICS payment system to support local currencies and a BRICS digital currency.

At the sub- BRICS level, members have collectively launched local national payment systems

that are non-dollar in nature and they might form the foundation for a BRICS alternative to the

US dollar-dominated SWIFT. BRICS have also shown interest in central bank digital

currencies, China has already launched its non-dollar digital renminbi, and a market instrument,

yuan oil futures, to de-dollarize global oil trade. (Council on Foreign relations, 2022)

4.1.1. NDB De-dollarizing Development Finance

The New Development Bank (NDB) is committed to enhance the financial independence of

BRICS countries by introducing a fundraising program in local currencies to fulfill its objective

of eliminating reliance on hard currencies The NDB has has also given leverage of providing

local currency lending program, to help member countries reduce the foreign exchange risk for

borrowers and fosters the growth of local capital markets. Additionally, the NDB also

highlighted the use of borrowing countries' policies, regulations, and oversight procedures, as

it believes this approach expands national capacities and yields better long-term development

outcome. These initiatives collectively lessen their dependence on dollar-denominated

financing. (RT International, 2017).

The formation of the NDB fundamentally enables the BRICS states to borrow from

international capital markets at much lower rates. The collective goal pursued by the five

BRICS nations increased the NDB's credit rating. The NDB was given an AA+ credit rating

by S&P and Fitch, higher than any credit rating of any other BRICS country, comprising China.

40
Due to its excellent credit standing, than most of the individual BRICS members, the NDB is

able to access global capital markets at comparatively low costs from the bond markets and

provides its members with loans at competitive interest rates—some of which are even lower

than what some BRICS sovereign borrowers could obtain on their own. Leslie Maasdorp, vice

president of the NDB, highlighted the advantages of the NDB's decreased borrowing costs in

2019 and mentioned that this advantage enables the NDB to offer loans to its members at

competitive rates. The NDB also assists the BRICS countries in reducing their dependency on

dollar funding by providing loans in local currency and, where necessary, giving local laws

and regulations priority. (NDB, 2017, pp. 6, 14).

Despite BRICS's claim that they have no plans to undermine the US dollar, Kamath suggested

that "50 percent (of projects) should be local currency financed." The NDB's General Strategy

2017–2021. In order to "avoid foreign exchange risks for borrowers," it will "rely on local

currency lending to the extent feasible" and actively seek opportunities to offer local currency

loans “both to reduce risks to borrowers as well as to promote local capital markets” Besides

promoting local currency lending, the NDB has also approved loans in other moneysuch as the

euro and the Swiss franc in 2019 to diversify its source of funding away from the US dollar

(NDB, 2020, p. 4).

According to the plan the NDB is looking for alternate sources of funding from nondollar

capital markets in order to lessen the burden of dollar based loans To lower its funding costs,

the NDB , in nondollar markets has progressively earned a AAA rating in capital markets

outside of the BRICS, like Japan, as well as in BRICS countries like China and Russia. (Fitch

Ratings, 2019). Gaining a more positive credit rating in several currency zones makes it

possible for the NDB to access capital markets in those locations, diversifying its funding

41
source. NDB’s “intention is to not only build a dollar curve but also to expand it for other

currencies, such as sterling and euros” (Kadaabi, 2021).

The NDB has introduced ond programmes and to boost investment for BRICS countries. It has

registered its bond programmes in South Africa, ruble bond programme in Russia. (NDB,

2019). The NDB is also assisting member states through local currency loans. In 2019, the

NDB also authorised its first loans denominated in rand, equivalent of USD 1.2 billion. Over

half of the NDB's lending to South African borrowers was made in rand, while roughly two-

thirds of its total approvals for projects situated in China were expressed in renminbi. This

demonstrates NDB commitmnt to extend loans in local currencies. (Patrick Bond, 2021)

4.1.2. The Yuan Oil and Global Oil Trade

Oil and Trade financing in Dollars highlights a significant trend in the The U.S. dollar

dominance in the existing financial landscape. The main benchmarks for oil prices, Brent and

West Texas Intermediate (WTI), both are incorporated in the U.S. dollars. Some scholars are

of the opinion that the future of the dollar is inter-connected to the global oil market (Luft,

2019).

BRICS countries, collectively, have the strength to challenge this system because they are the

biggest importer of oil, relative to the European Union. China and Russia, two of the largest

energy importers and exporters, are working to accelerate “yuan oil futures” within BRICS,

which can potentially threaten the US dollar's dominance in the oil market (Duggan, 2022)

China introduced yuan oil futures on the Shanghai International Energy Exchange. These

futures are priced in Chinese renminbi (RMB) and can be converted into gold on the Shanghai

and Hong Kong Gold Exchanges. Hence, China's oil suppliers can be paid in RMB and convert

it to gold instantly (Fostor, 2018).

42
Although the volume of the Shanghai-traded yuan oil futures is still behind competitors like

the London-traded Brent oil futures and the New York-traded WTI oil futures, they have

already significantly exceeded identical offers traded in Tokyo and Dubai. Leading central

bankers have quoted the sharp increase in yuan oil futures. For instance, despite having very

linited market share before 2018, Bank of England Governor Mark Carney (2019) noted that

"the renminbi is now more used than sterling in oil future benchmarks." (Graham, 2018)

China has increased its advocacy of petroyuan, renminbi-denominated oil trading in response

to the current tussle related to US-China trade. China is displaying a strong global demand for

a nondollar-priced oil trading system. This is evident through Chinese Foreign Minister Wang

Yi visited Saudi Arabia, Turkey, Bahrain, Iran, UAE and Oman for a week-long trip in 2021.

This visit was an indication that China wants to negotiate long-term energy contracts with

significant Gulf energy producers in order to decide the terms of oil pricing and exceed the

petroyuan's ascent (Yaung, 2021).

The possibility of a petroyuan would decrease the impact of US sanctions by enabling nations

subject to them—significant oil exporters like Russia and Iran—to access international markets

through non-dollar payment methods and other currencies.

Promoting yuan oil futures is China's is the motivational force for encouraging the use of

renminbi in oil trade and risk hedging, particularly when paying actual oil deliveries to lower

exchange risks. Since the commodities trading involves both buyers and sellers, the Chinese

government is unable to initiate the yuan oil futures on its own and guarantee a rapid increase

in trading volume. However, The successful launch of yuan oil futures and the outperformance

of trading volume indicates a rise intent in the market to de-dollarize the global oil trade.

(Russian Matters, 2018).

43
Due to the major Russian energy corporations facing significant U.S. sanctions since the 2014

Ukraine conflict, Russia has a great interest in dedollarizing the global oil trade. Russia, the

greatest exporter of natural gas and oil in the world, rely heavily on these two commodities for

its economic stability. In 2017, over 40% of government revenue and 60% of Russia's export

earnings is generated from Russian oil and gas industry Russia received assistance and

International support from the BRICS after US sanctions were placed on Russian businesses.

Russian oil firms and consumers now have access to myriad alternative trading platform thanks

to China's introduction of yuan oil futures. (China MOFA, 2017)

In relation to gold, the capacity for the yuan oil futures to further dedollarize the global oil trade

is even greater. By offering trading infrastructure to facilitate the conversion of oil into gold,

China has made the yuan oil futures more attractive. The renminbi acts as an intermediary

funding step in this process. The dedollarization of the world oil trade can be persued through

BRICS own gold pricing mechanism rather than being dependent on the prices set by the U.S.

This would allow for the trading of oil using gold with the minimum exchange risk. The debates

are ongoing regarding the prospect of creating a unified gold trading system, both inside and

outside of the group. (TASK, 2018). This marks a significant shift towards a possible BRICS

alliance in the global physical gold market, in which the four BRICS nations—China, Russia,

South Africa, and Brazil—are the stakeholders. China and India, being the two biggest gold

consumers in the world. Oil producers might consent to trade oil for gold instead of U.S.

Treasury securities when combined with the gold-backed trading of yuan oil futures,

significantly reducing the dollar’s position in the world oil market. Apart from de-

dollarization, a BRICS single gold trading system would also stabilise the domestic currency

because it would reduce reliance of BRICS members from foreign pricing. (MOFA, 2022)

44
4.1.3. BRICS Alternatives to SWIFT

The BRICS nations have been developing their own international transaction mechanism that

can function as an alternative for SWIFT, that is not dependent on the US dollar. This allows

the BRICS states to devise their own policies, regulations for international banking and

settlement, particularly those targeted by the U.S. frequently. Furthermore, BRICS can

incentivise the outreach for their own system through expanding their financial and political

clout to other nations . In recent years, a hina and Russia have both introduced domestic

substitutes for SWIFT global banking network and introduced their own cross border financial

mechanisms. Renminbi internationalisation accompanied with wider renminbi usage also had

the added benefit of lowering risk associated with foreign exchange and US sanctions for China

and its trading partners, such Russia or Iran. (Soldatkin, 2016).

After the conflict in Ukraine in 2014, Russia's government responded immediately to western

sanction risks through formulating an international ruble payment system. (Reuters,2010).

Apart from the South Africa, the BRICS nations have structured their own autonomous national

payment networks. The creation of autonomous national payment systems is initiated by China

and Russia; as they have the probability to be serving as the foundation for a future payment

system that extends beyond the boundaries of the BRICS. One clear advantage of establishing

a separate digital retail bank card network is the ability to escape taxation fees levied by major

American card network providers like Visa and Mastercard, as opposed to reliance upon them..

More significantly, though, if a nation lacks its own payment rails and depends on Visa or

Mastercard, as South Africa presently does, as well as Russia did prior to 2014 and China did

prior to 2002, then such payment rails may be completely removed as part of the U.S. sanctions.

Domestic consumers can longer make use of their bank cards for simple retail transactions as

a result of this withdrawal. The full payment life cycle can be stabilised through escaping the

45
global system denominated in U.S. dollars by connecting national payment rails to an

alternative cross-border system. (Unionpay, 2022)

[Link]. China

In 2015, China introduced its individual Cross-Border Interbank Payment System (CIPS), The

UnionPay bank card network, expanding reach of its renminbi-based financial infrastructure

internationally over the last ten years. The goal is to encourage increased renminbi usage and

facilitate renminbi internationalisation. (Reuters, 2022)

Through CIPS, international banks can undergo ransactions in renminbi across the borders

immediately, Thereby, reducing the chance of disclosing transaction information to the U.S,

this enables CIPS to function as an effective alternative tool for transactions for SWIFT and

lessens the threats of the U.S. sanctions. (SWIFT, 2017).

More than 150 million UnionPay cards have been issued that are operating in 67 countries and

regions outside of China as of March 2021, and the UnionPay acceptance network has

expanded to 180 countries and regions, which also accept UnionPay mobile payments

(UnionPay International, 2022).

The globalization of UnionPay further promotes the use of renminbi in cross-border

settlements. Every BRICS nation accepts UnionPay to a large extent. In Russia, UnionPay has

also advertised its mobile payment functionality. In 2018, UnionPay and Huawei collaborated

to jointly launch their Huawei Pay service in Russia (JournalTOCS, 2018)

[Link]. India

In India, the National Payments Corporation of India, which incorporates the nation's "RuPay"

bank card network, and UnionPay were granted permission to collaborate in 2018 by the

46
Reserve Bank of India. With this clearance, holders of UnionPay cards could make rupee

transactions at any ATM in India . This agreement allows over 90% of Indian ATMs to

recognise UnionPay cards as of January 2020 (Pine Labs, 2020).

[Link]. South Africa

UnionPay began doing business in South Africa in 2008. Within ten years, the majority of the

ATMs operated by the four main South African banks began to accept UnionPay bank cards

as payment methods. To make it easier for local account users to make payments in China,

Standard Bank of South Africa introduced its UnionPay cards in both physical and virtual form

in 2019 China and the other BRICS members now have the opportunity to de-dollarize bilateral

payments by using yuan with the help of UnionPay. (Xinhua, 2019).,

[Link]. Russia

Russia's de-dollarization efforts began in 2014 as a response to US sanctions. Following the

annexation of Crimea, President Obama ordered to target bank cards from seven Russian banks

(Xu, 2020). This disruption halted Russia's economic activities. Additionally, the US and the

UK threatened to exclude Russia from SWIFT. Consequently, Russia started working on two

key pieces of financial infrastructure to mitigate its vulnerability to US sanctions: (1) a national

payment system to replace Visa and Mastercard and (2) a financial messaging system as an

alternative to SWIFT. (Financial Tribune, 2019; Russia Briefing, 2019)

The Russian established the National Payment Card System Joint Stock Company under the

central bank’s ownership. In July 2015, it was named the card "MIR," meaning both "world"

and "peace" in Russian. By mid-2019, 312 banks in Russia had joined the system illustrating

to other countries how to challenge US-based payment giants like Visa and Mastercard (MI,

2019).

47
Since 2014, Russia has devised the "System for Transfer of Financial Messages" (SPFS), a

Russian equivalent to SWIFT. The SPFS can link with foreign banks and entities. By 2019,

eight foreign banks and 34 legal entities had agreements to join SPFS,(Chaudhury, 2019b).

Russia is keen to expand SPFS internationally. Under Putin regime in 2018, Russia linked its

SPFS with Iran's SEPAM and introduced it to banks in the Eurasian Economic Union (EEU)

region. In 2019, Russian Finance Minister Anton agreed with Turkey to use the ruble and lira

for cross-border payments, increasing the likelihood of connecting Turkish banks to SPFS and

using MIR cards in Turkey (Reuters International, 2020)

4.1.4. “China-Russia Plus” Coalition

Russia and China have joint hands to expand the acceptability of MIR card system and expand

the outreach of SPFS infrastructure internationally. In order to reduce the risk related to

SWIFT, Russia is establishing a mutually beneficial payments system with China as a

stakeholder that would harmonise the two nations' national payment systems Some studies

reveal that India has shown interest in joint venture with China and Russia to explore SWIFT

alternative to ensure stable trade with nations subject to US sanctions. India currently does

possess its domestic financial linking system, it has plans to link a with Russia’s SPFS, which

could possibly be linked with China’s CIPS. Once this idea is materialized, this linked system

would cover most parts of the world (Hillman, 2020, p. 5).

4.1.5. BRICS Digital Currency

A unified and potentially groundbreaking move towards de-dollarization is the ongoing

development of the "BRICS Pay" system. This system will serve as a single contactless

payment solution connecting the national payment systems of BRICS countries via a unified

48
cloud platform. BRICS Pay will utilize advanced fintech innovations from these countries to

seamlessly integrate their individual payment systems. The system will connect BRICS

citizens' credit or debit cards to online wallets, accessible 24/7 through a mobile application on

their smartphones. This initiative represents BRICS' collective effort to create a unified system

for retail payments and transactions among its members, with plans to extend the platform's

availability to non-BRICS countries as well. (BRICS Business Council, 2021 , p. 67).

The primary benefit of BRICS Pay lies in enabling the use of BRICS members’ national

currencies directly for external payments. Currently, external settlements between BRICS

nations necessitate conversion into US dollars, involving US banks. For instance, a yuan-ruble

non-cash transaction through UnionPay must first be converted into US dollars. BRICS Pay

will eliminate the need for such conversions and the involvement of US banks, as payments

will be settled in the national currencies of BRICS members (Ali Ahmadi, 2021)

BRICS Pay will reduce reliance on international payment organizations such as SWIFT, Visa,

and Mastercard. This could potentially give BRICS members a collective edge to compete with

traditional banks in the global financial services market, presently dominated by US banks and

governed by US regulations. The interconnected BRICS Pay system, which integrates the

national payment systems of BRICS members and allows participation from non-BRICS

countries, has the potential to disrupt the financial dominance of established Western global

financial entities. (Xinhua, 2019).

In addition to discussing a common BRICS cryptocurrency, BRICS members have been

developing their own central bank digital currencies (CBDCs), which could potentially

transform the global currency system. (People’s Bank of China, 2016).

Since 2020, months Other BRICS nations have been exploring their own Central Bank Digital

Currency (CBDC) options. The Central Bank of Brazil has already established key

49
infrastructure for a CBDC, launching its blockchain platform PIER (Platform for Information

Integration of Regulatory Entities) in 2020, which facilitates data exchange between financial

regulators (Central Bank of Brazil, 2020). Additionally, Brazil introduced PIX, a 24/7 instant

payment system designed to enhance the efficiency and competitiveness of the retail payment

market (Ayres, Mandl, and McGeever, 2020).

Russia is also accelerating its digital currency development. Elvira Nabiullina, Governor of

Russia’s central bank, described digital currency as "the future for our financial system" due to

its alignment with the digital economy's growth (Shead, 2021). In 2020, Russia’s central bank

unveiled its digital ruble plans, aiming to initiate a program by the end of 2021 (Bank of Russia,

2020; Shome, 2021). As of October 2020, at least five Russian banks had shown interest in

participating in future trials of the digital ruble (Pesto, 2021).

South Africa is also considering its own CBDC. The South African Reserve Bank has been

researching CBDCs since late 2016 (South African Reserve Bank, 2018).

After China introduced the digital renminbi, the Indian government proposed in February 2021

to ban all private cryptocurrencies and establish a framework for an official digital currency

(Ghosh, 2021). In 2018, Governor Shaktikanta Das announced that the Reserve Bank of India

is preparing to launch its own digital currency (Ghosh, 2021).

At this stage, none of the discussed alternative payment systems has achieved a truly global

status, except for China's UnionPay network. However, the development of these alternatives

indicates that BRICS members are keen to take protective measures and create their own

financial infrastructures to shield their international transactions from sanctions. (Xinhua,

2019)

50
4.1.6. BRICS Plus

In 2017, the BRICS members along with representatives from Egypt, Guinea, Tajikistan,

Mexico, and Thailand, held the “Dialogue of Emerging Market and Developing Countries”.

This dialogue was a pivotal moment to launch the “BRICS Plus.” BRICS Plus is the expansion

of the BRICS platform to promote regional integration and attract non-BRICS states and

institutions, such as the the SCO, South African Customs Union, EEU, South Asian

Association for Regional Cooperation, and ASEAN + China. BRICS Plus brings together 35

states to form an expanded platform that can coordinate policies with BRICS’ regional partners

across the four continents. As such, it provides a joint maneuver for de-dollarization policy

coordination and non-dollar construction of financial infrastructure. (SCO, 2019)

A notable example of effective BRICS plus mobilization through informal institution at a sub-

group level is the SCO. Several BRICS members are members of the SCO– both China and

Russia are founding members, and India joined as a full member in 2017. With three of the

five BRICS members being also SCO members, it is likely that these two non-Western

institutions will conduct policy sharing and policy coordination through both platforms,

including policies designed to reduce their dependence on the US dollar. The SCO was initially

established for security cooperation, but it has gradually taken on economic dimensions as well.

The development of SCO financial cooperation initiatives suggests that China, India, and

Russia can potentially introduce de-dollarization policies in the SCO and achieve synergies

with similar initiatives in BRICS policy platforms. (Hillman, 2020, p. 5).

The SCO’s consideration of launching its own development bank suggests a BRICS-like path:

reducing reliance on the U.S. dollar financing. The convergence of the SCO and BRICS into a

single institutional framework set the foundation for closer economic and financial policy

51
cooperation. Such similarities can provide formal channels for further policy coordination

between these two developing-country coalitions on issues such as: expanding the scale and

scope of bilateral currency swaps, promoting the use of local currencies in cross-border trade

and investment, and eventually reducing the countries’ dependence on the US dollar. Xinhua,

2019).

We have demonstrated that BRICS and its members have pursued de-dollarization through the

“self-relient” strategy using both institutional and market mechanisms to achieve greater

autonomy and influence. The specific examples of the NDB and development finance de-

dollarization, BRICS commitments to develop a BRICS alternative to SWIFT, and the

members’ joint vision for a BRICS digital currency suggest that BRICS has demonstrated a

high level of coalitional strength in executing high-effectiveness de-dollarization initiatives.

These are club goods that could serve as critical elements for developing an alternative

nondollar global financial system and help shield members from the dollar volatility and US

sanction risk. Moreover, there are also powerful sub-coalitional dynamics at play. De-

dollarization initiatives at the sub- BRICS level have been most active, with Russia and China

being the two pivotal states leading these “self-relient” initiatives. BRICS has attempted to

create broader coalitions by leveraging the members’ overlapping memberships in other non-

Western organizations, such as the use of BRICS Plus and its engagement with SCO and EEU.

Although such broader mobilization has not yet yielded significant tangible results and has not

led to any broader de-dollarization public goods, BRICS has certainly demonstrated its

leadership as the rule maker and agenda setter for promoting the use of local currencies in

international trade and finance, compatible with the goal to achieve higher international

influence. (N Duggan, 2022)

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Currently, predominantly Russia and China’s “self-relient” de-dollarization initiatives are

unlikely to liberate the BRICS members from the dollar-based global financial system any time

soon because of three major constraints. First, the limited capacity of the NDB means BRICS

cannot achieve full de- dollarization in international borrowing for development finance. All

BRICS members have been strongly in favor of promoting local currency develop- ment

financing through the NDB, but the NDB’s capacity is much more limited relative to traditional

development financiers such as the World Bank or the Asian Development Bank. While the

NDB has been considering potential expansion, its size and scope constrain BRICS collective

de- dollarization potential. Second, not all BRICS members have the resources or capacity to

sponsor their own market infrastructures or instruments. Now only China and Russia have

political incentives and the capacity to develop their own alternatives to SWIFT and seek to

connect them. Moreover, only China’s market size is large and influential enough to launch an

alternative oil futures contract, like the yuan oil futures, to the US dollar market. Thus, it is

currently unlikely that the BRICS members would completely abandon the US dollar-based

financial infrastructure. Third, the internal geopolitical dynamics within BRICS and its

members’ relationships with the United States may prevent BRICS from formally making the

group a de-dollarization advocacy coalition, which would be the fastest way to implement the

“self-relient” strategy and gain followers. (BRICS Plus, 2021)

4.2. “Systemic Revision” Strategy

Besides “self-relient” initiatives, BRICS countries have also pursued de- dollarization through

a “systemic-revision ” strategy to gain financial autonomy . To this end, BRICS members have

diversified their reserve assets at the individual state level and have also collectively built an

internal layer of support through the dollar-based CRA to modify their dependence on the IMF.

BRICS also jointly negotiated the reform of the IMF SDR. BRICS’ stock exchanges have also

formed an alliance that has been reshaping global equity markets. Such BRICS-level initiatives

53
demonstrate BRICS’ strength as a de-dollarization coalition working within the existing dollar-

based system to improve BRICS autonomy and influence. At the sub-BRICS level, members

have been pro- moting the use of local currencies in bilateral trade and strengthening internal

currency cooperation by using bilateral currency swaps to diffuse the US dollar’s dominance

as the vehicle currency. These sub-BRICS initiatives do not directly improve the global

influence of the members, but they help achieve the goal of greater autonomy by reducing

exchange risk in bilateral trade and reducing the risk of US sanctions. (IMF, 2020)

4.2.1. Self-Defense Against the Dollar

An important aspect of the US dollar’s supremacy is strengthening their self-defense against

the US dollar hegemony, major BRICS central banks, especially the Bank of Russia, have

diversified their reserve assets by reducing their holdings of US Treasury securities. Moreover,

BRICS also established CRA as a pooled US dollar reserve and an internal first line of defense

to help members. All of these measures allow BRICS members to strengthen their self-defense

against volatilities in the US dollar and improve their internal support for liquidity in times of

dollar shortages (Xinhua, 2019).

Russia has been the most aggressive among BRICS in substituting US dollar reserves with

alternative reserve assets. Since 2013, the Bank of Russia has been trying to reduce the number

of transactions conducted in US dollars and has increased the use of euros, renminbi, and rubles

in settlements. The U.S. Treasury International Capital (TIC) data showed that Russian

holdings of Treasury securities declined by 84 percent between March and May 2018, falling

from USD96.1 billion to USD13.9 billion in just four months. (Reuters, 2018)

Among the BRICS, Russia has been the most active in replacing US dollar reserves with other

types of reserve assets. Since 2013, the Bank of Russia has made an effort to boost the usage

54
of euros, renminbi, and rubles in settlements while decreasing the amount of transactions

carried out in US dollars. (Economic Times, 2013)

Russia’s aggressive de-dollarization policies are conducive to strengthening a potential Russia–

China partnership for de-dollarization. Russian experts have suggested that Russia’s push to

accumulate renminbi is not just about diversifying reserves but also about encouraging China

to become more assertive in challenging US global economic leadership (Simes, 2020).

The Bank of Russia has been executing a gold strategy in addition to substituting other

currencies for US dollar reserves in order to shift away from US assets. Over the last ten years,

it has quadrupled Russia's gold reserves, making it the country's top gold buyer. The value of

Russia's gold holdings surged by 42% between 2018 and 2019, to USD107.5 billion (Moscow

Times, 2020)

The BRICS CRA helps further strengthen BRICS collective defense against balance of

payments crises due to US dollar shortages. Some scholars view the CRA as an institution that

challenges the IMF, especially in light of BRICS’ dissatisfaction with the conditionalities of

IMF lending and the domin- ation of Western powers in the IMF (e.g., Robert and Katada,

2014). Yet the CRA remains dependent on the IMF, and it cannot serve as a substitute for the

IMF. Only 30 percent of accessible CRA funds are available to BRICS members on demand,

whereas accessing the remaining 70 percent requires arrangements with the IMF. This

provisional dependence on the IMF preserves the sustainability of the CRA’s pooled US dollar

reserves. If the maximum amount is insufficient, then BRICS members would resort to the

IMF. This establishes an internal first line of defense for BRICS members up to the authorized

amount. Thus, the CRA modifies BRICS dependence on IMF’s rescuing mechanisms by

adding an additional layer of defense and acts within and conditional upon the existing dollar-

based system while strengthening BRICS’ self-defense against a US dollar shortage (DI, 2019).

55
4.2.2. Reforming the Global Reserve Currency Structure

The BRICS members are reforming the existing multilateral international financial institutions

to disrupt the US dollar’s dominant position in the current global reserve currency structure.

Various initiatives like reform of the IMF’s SDR and supporting the renminbi’s inclusion into

the SDR basket showcase their mutual commitment. China has showed interest in making the

SDR into a “super-sovereign reserve currency”. Later, the United Nations (UN) echoed Zhou’s

idea and proposed establishing a new Global Reserve System based on the IMF’s SDR. (len

Zhou, 2004)

This sentiment resonated with Brazil’s decision to invest USD40 billion and USD10 billion,

respectively, in IMF bonds, with another USD10 billion from India In this context, the issue of

reforming the global reserve currency structure has become an important issue for BRICS, and

members have shown their collective commitment to diversifying their reserves away from

being overly concentrated in US dollar assets. (carry, 2010; Stuenkel, 2010).

BRICS’ efforts to reform the existing system have thus far led to limited success. BRICS

combined voting rights at the World Bank and IMF and BRICS total SDR quota are all below

15 percent of total . These numbers are still misaligned with BRICS’ collective economic

power, which represents close to a quarter of global GDP. This limited success indicates the

mounting difficulty facing BRICS members to further advance their voice and represen- tation

in the existing global system. If reforming the system from the inside becomes unlikely, BRICS

may resort to “self-relient” strategies. (Du, 2020)

4.3.3. Diffusing the Dollar’s Dominance in Trade

BRICS members are keen to promote the use of their national currencies in trade settlements,

and they have discussed this issue at BRICS summits for nearly two decades . High-level

56
agreements on trade de- dollarization, as expressed in BRICS joint statements, have

materialized through bilateral agreements among the members. For example, in June 2009,

China and Russia reached an agreement to move toward settling bilateral trade in local

currencies A few days later, China and Brazil also announced an “initial understanding” to

gradually eliminate the US dollar in their bilateral trade, which was estimated to be USD40

billion at that time (melo Press, 2009)

BRICS’ efforts toward de-dollarization in international trade is evident, especially in bilateral

trade. Under stringent sanctions in 2014, the bilateral currency swap between Russian and

Chinese central banks enabled Russia to circumvent Western isolation and fostered a de-

dollarization dynamic between China and Russia (Antonidassi, 2017).

At the BRICS country level, Russia has achieved the greatest reduction in the use of the US

dollar in its trade since 2013. Russia’s trade de-dollarization hit a milestone by the fourth

quarter of 2020 when the share of its exports sold in US dollars fell below 50 percent for the

first time. However, the decline of the US dollar was not replaced by the ruble but rather picked

up by the euro. The share of euro used in Russia’s export transactions increased to 36.1 percent,

contrasting with a mere 8.7 percent in the first quarter of 2013. (Vorobyova, 2009).

Bilateral trade de-dollarization within BRICS has progressed most rapidly in Russia–China

trade. This has been catalyzed by the increasing use of local currencies in Russia’s exports to

China, especially after major Russian energy companies stopped using the US dollar in their

energy exports. The rise of the euro in Russia–China trade also accelerated in 2019, when

Russia’s top crude oil producer, Rosneft, switched all export contracts to euros from US dollars

to protect itself from intensifying US sanctions (Aliaj and Astrashekayaha, 2019). By the end

of 2020, more than 83 percent of Russian exports to China were settled in euro. The euro has

57
now replaced the US dollar and has become the primary vehicle currency in Russia–China

trade. (Du,2011 fari,2011)

As their relations with the United States have both worsened in 2018, Russia and China have

moved closer to jointly de-dollarize bilateral trade and promoting the use of local currencies in

trade settlements. (Deutsche Welle, 2018). In 2019, following his meeting with President Xi,

Putin confirmed that Russia and China “intend to develop the practice of settlements in national

currencies”. Meanwhile, Russia and China signed a joint declaration announcing the elevation

of their bilateral relationship to the level of “comprehensive strategic partnership of

coordination for a new era” (PRC Gov., 2019). This upgrade in their relationship enables China

and Russia to ramp up their collective efforts to reduce dependence on the US dollar. These

developments suggest that Russia and China are moving closer to forming a de-dollarization

hub as both of their relationships with the United States have deteriorated. (RT International,

2019a)

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 CHAPTER 5:

U.S. RESPONSE TO BRICS MOBILIZATION

5.1. The BRICS from a U.S. Perspective:

The BRICS will be considered significant for the U.S. policy agenda if they undertake

transformation into new aspects or ideas. The BRICS lacks consent as the groups lack

coherence and consistency about its shared objectives but the BRICS' significance for US

foreign policy decisions remains intact. From 2003 to 2008, transformative periods, BRICS

underwent collaborative development, showing a clear path towards the establishment of

institutions and capability. The BRICS has the leverage of combined influence to independently

negotiate terms of the world governance and to limit. The United States’ opportunities through

marginalizing it. (Antonidassi, 2020)

The American response to the BRICS revolves around BRICS mobilisation to change global

governance. The U.S. foreign policy seem uninspired, frequently considering the BRICS as

non-entities. Leading scholars even go so far as to say that although the BRICS are seen as an

emerging future leader the system they follow, are not recognised as central to U.S. chosen

poles in changing the international order. (Ikenberry, 2021)

Analysis reveal three prospects for U.S. foreign policy development in context of BRICS' rise.

First, it puts pressure on authorities to undergo reconciliation with the discontent entities

regarding the political and economic leadership of the U.S. in response to multipolarity.

Second, the emergence of the BRICS highlights global dissatisfaction with the dollar’s rise and

contrasts the U.S. and BRICS mechanisms in providing global public goods, shifting the policy

discussion away from bilateral China vs. U.S. competition and towards wider multilateral

processes of institutional reform ( Fredrick, 2020, Jacob, 2021)

59
5.2. The Question of a U.S. Response to the BRICS

Numerous studies looking into BRICS frequently provide an explanation for how the BRICS

group will be perceived in the U.S. policy discourse. Jim O'Neill, an investment banker at

Goldman Sachs, coined the term "BRIC" to refer to the developing emerging market economies

with the greatest potential for growth. The mechanisms of contrasting developing markets with

developed nations has gained emphasis , which has prompted BRICS-specific courses to be

offered in U.S. business schools (Xinhua, 2019).

Recent data lacks the study on capacity for growth of the BRICS countries; according to the

IMF's reports, by 2016, these economies would have shrunk by 12% This lead to skepticism

on BRICS' capacity to sustain its economic position. (Kupchan, 2016) With the exception of

China, Ruchir Sharma , a prominent schlar in the discussion surrounding the "end of the

BRICS," contends that the BRICS inherent political divisions which have resulted them to lose

momentum as a group, thus the U.S. economic analysts are increasingly focusing on other

developing arenas, such as MIST or Next-11, MIST, 2021) (Rohan Sharma, 2022)

Even after they began operating as a political bloc, debates concerning BRICS as an economic

group have flourished in the United States, with their achievements and future prospects being

assessed using economic criteria. Three points need to be assessed from U.S. points of view in

this order. Firstly, Economic performance is not a pre-requisite for BRICS membership

continuity. For instance, South Africa's inclusion, economically unjustified, but politically

motivated as it opens corridors into Africa and propagate RICS' influence. The group lacks

policies to address economic failures. Secondly, BRICS has pursued self-sufficient political

influence, transforming from a U.S. investment target to a major actor in global governance

debates, specially in financial architecture reform, security, and trade. This shift indicates

attention towards the question: How does the U.S. respond to the idea of BRICS? (DI, 2021)

60
BRICS' ability to lead and shape a multipolar world order depends on attracting masses,

including the U.S., which must acknowledge the importance of multipolarity. This strategy

limits U.S. options, forcing it to create new rules despite leveraging from the previous order.

Achieving multipolarity requires BRICS to control the agenda, leaving the U.S. with limited

alternatives, as it is unlikely to be a straightforward follower due to its superpower status. The

inclusion of the U.S. need credible incorporation of U.S. interests and ideas in the monetary

project. Few BRICS countries might share good relations to the U.S. and more inclined towards

pro-western interests, the BRICS as a collective entity does not hold this opinion to incorporate

U.S. interests into its project. Instead, it see itself as a separate entity having a distinct approach

from the U.S. towards the international system. Infact, it challenges the legitimacy of U.S.

interests and influence. Although there may exist opportunities for joint U.S.-BRICS ventures,

it cannot be said that the transition to multipolarity will be mutually beneficial. For BRICS,

difficultly lies in exercising "self-reliant strategy," because being part of the group is assumed

safer than exclusion, posing a significant threat for U.S. foreign policy. (Regan, 2021)

5.3. Decline in U.S. Leadership

The narrative of power shifting is not new, China is often seen as the emerging power

challenging the U.S. monetary threshold. China has already dominated the purchasing parity

power. BRICS however, is a coalition the ascendency of which is seen as a strategic manuever

for multipolar world, providing the U.S. the choice to leverage or support BRICS' driven

changes in the international system. (antonidassi, 2021)

The rise of BRICS is debatable and contested views exist regarding this. Rise of BRICS can be

seen as a potential challenge or opportunity to transform the international system towards

multipolarity. The analysis has three sides: first, official foreign policymaking bodies'

representation of BRICS; second, analyzing BRICS structural formation within the broader

61
foreign policy elite, focusing on think tank and policy engagement; and third, assessing how

BRICS is perceived in U.S. academia. (Xinhua, 2019).

Analyzing U.S. engagement with BRICS is inherently limited, as it involves primarily the core

foreign policy elite rather than the general periphery. It is difficult to measure the public

sentiment towards BRICS as it is a recently emerging phenomenon and enckmpasses limited

understanding, even among professionals. No readily available source indicates U.S. attitudes

toward BRICS, but surveys on attitudes towards the rise of China, U.S. leadership, and the

global power balance are available. For instance, a 2010 Research survey revealed that about

65% of the public favored a shared leadership role for the U.S., with 15% advocating for sole

global leadership and 20% supporting no leadership at all. ( Economic Times, 2010)

Foreign policy analysts often question the relevance of BRICS initiatives , with the lack of

coherence on joint projects like the New Development Bank(NDB) reinforcing this skepticism.

While the BRICS' overall impact on policy debates has increased, particularly with the new

development bank as a tangible commitment, emerging think tanks often treat BRICS as

lacking dedicated programs or projects. The dominant view is that BRICS is an experiment in

cooperation rather than a strengthened force capable of introducing a New world order. Doubts

about BRICS' economic stagnation and China's relative power acting as a hindrance to the

group's evolution still exists. (NDB, 2021)

The U.S. National Security Advisor called BRICS as a ‘mixed bag,’ directing towards the non-

alignment of its member countries. Particularly, India and Brazil might prefer to leave the

group. China and Russia, however, are keen to invite others into their emerging axis. China

now leads the Sino-Russian alliance, reversing the Cold War dynamic. The potential inclusion

of Saudi Arabia, UAE, and Iran in BRICS could raise U.S. concerns, especially regarding

Middle Eastern dynamics. (Tharoor, 2012).

62
 CHAPTER 6:

CONCLUSION

This research has examined the key of coalitional de-dollarization by delving into the

comprehensive nature of BRICS as a de-dollarization coalition aimed at reducing dependence

on the U.S. Controlled world order. Through a risk management perspective, it introduces he

“Pathways to De-dollarization” framework, for an emerging power alliance like BRICS to gain

independence from the dominance of the US-led global politico-economic system. This

framework outlines two strategies; self-reliant and systematic revision. The core concept of

these two strategies are to introduce various self-regulatory institutions or creating reforms in

the existing market-based mechanisms, respectively.

Our study adds to the body of literature on BRICS studies, the International Political Economy

of emerging powers and institutions, global financial governance, and currency statecraft.

Three theoretical ramifications of coalitional de-dollarization are identified by research. First

off, coalitional de-dollarization differs from national or unilateral monetary de-dollarization in

that it entails international discourses and debates intended to establish multilateral

organisations and infrastructures devoid of the dollar. Our findings reveal that all BRICS

members support the idea of de-dollarization in response to various beneficiaries. Studies

revealed countries who were negatively affected by dollar volatility, such as Russia, would

pursue autonomous strategies. (e.g., avoiding sanctions).

Despite the U.S. dollar's current dominance, historically, it can be said that its status might not

be guaranteed forever. De-dollarization is a gradual, time taking, process, driven by numerous

international and domestic policy initiatives bolstering non-dollar settlements, rather than

quick reforms. Our analysis indicates that emerging financial technologies like blockchain,

digital currencies and financial infrastructure could accelerate a revisionist de-dollarization

coalition, creating new market infrastructures that bypass the existing incumbent system.

63
BRICS “self-relient” de-dollarization approach have been made use of at all levels of

coalitional strength. However, its “reform-the-status-quo” initiatives have thus far been limited

to group , sub-group, and unilateral levels and have not shown considerable, satisfactory

concrete achievements beyond the group level. BRICS has shown a concrete coalitional

strength in the pursuit of “self-relient” approach as evidenced in the use of the NDB for

development finance de-dollarization; the members’ commitment to a prospective BRICS

alternative to SWIFT; collective BRICS digital currency; and the BRICS Plus outreach efforts.

Although these initiatives are undergone at small scale, they allow new nondollar mechanisms

and help BRICS members in gaining greater autonomy and adding to the BRICS’ outreach by

upgrading BRICS de-dollarization sphere of influence. Therefore, they provide critical

components for developing an alternative nondollar financial system governed by BRICS.

Our analysis reveals that although Russia has persued the aggressive posture, the most active

member of BRICS in pursuit of de-dollarization is China as it has the posessess the greatest

capital, technological capacity and presents the most credible challenge to the dollar hegemony

among the BRICS members. Other members have been less enthusiastic toward de-

dollarization, but they have nonetheless participated. We demonstrate that the risk of global

finance migrating to an alternative financial system is real. While the immediate consequence

of this shift is the decline in the US ability to use sanctions against its strategic adversaries such

as Russia, the long-term challenges are immense, as sanction power is a critical tool that

strengthens US leadership without the use of military force. Furthermore, it raises questions

about US ability to advance its political and economic values in the global system and preserve

a soft power edge. To be sure, the US dollar is still the dominant currency in nearly every aspect

of the current global financial system, and it is unlikely that another currency will replace the

dollar any time soon. However, history reminds us that the US dollar’s dominant status should

not be assumed to last forever. De-dollarization is a secular trend that involves the

64
accumulation of many incremental policy initiatives targeted at encouraging nondollar

settlements. The process of de- dollarization is unlikely to be punctuated by sweeping policies

as part of a grand de-dollarization strategy that marks a recognizable inflection point in the fall

of the US dollar hegemony.

Key Findings

According to our analysis, the use of new financial technologies (such as blockchain, digital

currencies, and cloud-based financial infrastructure) can help advance the establishment of a

coalition for revisionist de-dollarization and bolster the legitimacy of mass mobilisation. A

coalition of this kind might result in the development of new market tools and infrastructure

that operate as global public goods with wider acceptance, keep the incumbent power out of

the system, and redirect international money flows.

“reform-the-status-quo” initiatives have allowed BRICS members to reduce their dependence

on the US dollar without creating new nondollar institutions or market mechanisms. These

initiatives are less effective than “self-relient” measures due to the lack of nondollar

alternatives. They are likely to be less successful in de-dollarizing the existing global financial

system or enabling rising powers to achieve greater autonomy and influence in the global

system. However, BRICS group-level initiatives, such as the launch of the CRA as a first line

of defense before going to the IMF, and the collective bargaining for SDR reform, have

demonstrated a high level of coalitional strength, as BRICS present a united front to the

Western-dominated multilateral financial institutions. The sub-BRICS level de- dollarization

initiatives directly improve members’ autonomy. These measures, however, are of a much

smaller scope.

65
Given Russia's aggressive withdrawal of US dollar assets, any nation under US sanctions may

strive to lessen the impact of the penalties by unilaterally de-dollarizing its reserve assets

through its central bank and sovereign fund. In the BRICS framework, it is highly improbable

that all central banks will consent to withdrawing the dollar from their reserves. It is worth

noting that the US dollar remains the most extensively recognised currency in global

transactions, and US Treasury bonds continue to be the most optimal substitute for risk-free

assets . Some BRICS members are unable to sell US Treasury securities or the US currency on

a major scale due to their substantial dollar asset holdings. Therefore, currency devaluation of

U.S. dollars can cause BRICS countries to suffer significant losses. Lastly, some of these

reforms—like the SDR reform—need to be negotiated with the incumbent administration.

Small-scale collective actions are far simpler to organise than multi-party negotiations,

particularly when the ruling parties have substantial influence over the current structure. None

of the BRICS currencies, not even the renminbi, could assume the role of leading and sharing

the main currency power position with the US dollar, even if there was a chance for one. The

renminbi is not going to become the main currency in trade or international finance as long as

capital controls are tied to it.

As demonstrated by the use of the New Development Bank (NDB) for de-dollarization of

development finance, the group's commitment to a possible BRICS substitute for SWIFT, their

collaborative planning for a BRICS digital currency, and their wider BRICS Plus outreach

initiatives, BRICS has demonstrated significant strength in independent initiatives. Even

though they are still limited to small-scale, these projects strengthen BRICS' autonomy and

bolster its outreach through new, non-dollar institutional mechanisms. .

66
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