Olivia
February 14, Washington: Brazil, holding the BRICS presidency this year, has ruled out advancing a proposal for a common currency among the major developing economies. Instead, the country is focusing on initiatives that could reduce reliance on the U.S. dollar in global trade, according to four government officials.
While the idea of a shared BRICS currency has been discussed in previous summits, sources familiar with Brazil’s agenda confirmed that it has not been formally considered in technical discussions. Instead, Brazil is advocating for reforms to facilitate international payments in local currencies, aiming to make trade transactions smoother and less dependent on the dollar.
However, these efforts have not gone unnoticed in the United States. Former U.S. President Donald Trump, known for his strong stance on protecting the dollar’s global dominance, has repeatedly warned BRICS nations against attempting to challenge it.
Trump’s Threats Against BRICS Nations
Last month, Mr. Trump took to social media, asserting that BRICS would never be able to replace the U.S. dollar in international trade. He further warned that any country attempting to do so would face significant economic consequences.
“There is no chance that BRICS will replace the U.S. dollar in international trade, or anywhere else, and any country that tries should say hello to tariffs, and goodbye to America!” he wrote. His rhetoric intensified on Thursday when he threatened 100% tariffs on BRICS nations if they attempted to “play games” with the dollar. When asked whether he wanted to dismantle BRICS or join the group, Trump dismissed the idea, claiming that the alliance was created for a negative purpose and that even its members no longer wanted to discuss it.
“If BRICS wants to play games, those countries won’t trade with us,” he warned. “Any trading that gets through will be met with a 100% tariff at least. When they hear that, what do you think they’re going to do? They’re going to step back.”
Brazil’s Approach: Payment Reforms, Not a New Currency
Despite the aggressive stance from the U.S., Brazilian officials have emphasized that their initiatives are not designed to provoke any country. Instead, the focus is on reducing friction in global trade by facilitating smoother financial transactions.
According to three sources, Brazil is prioritizing technological advancements such as blockchain and the integration of payment systems to lower transaction costs. These measures are being developed in alignment with international standards set by organizations like the Bank for International Settlements (BIS).
One government official clarified that while BRICS countries are open to exploring ways to ease trade without full dependence on the dollar, there is no intention of eliminating dollar reserves. “No one wants to create trouble, but BRICS countries also don’t want to abandon the possibility of exploring alternatives,” the source stated.
Lula’s Stance on BRICS Currency Talks
President Luiz Inácio Lula da Silva has previously floated the idea of a common BRICS currency. However, he has recently toned down his stance, acknowledging that such a proposal is not currently a priority. While he continues to advocate for discussions on reducing dependency on the dollar, he no longer insists on creating a shared currency.
Last week, Brazil’s finance ministry and central bank met to discuss the country’s agenda for its BRICS presidency, including cross-border payment initiatives. These proposals will be presented at an upcoming BRICS meeting in South Africa, scheduled to take place alongside the G20 meetings. The discussions will help shape the agenda for the BRICS summit in July.
Looking Ahead
As Brazil leads BRICS this year, the bloc’s primary focus appears to be on improving financial cooperation rather than pushing for a new currency. While Trump’s warnings highlight potential tensions, BRICS members seem committed to exploring payment alternatives that do not directly challenge the dollar’s dominance. The upcoming summits will likely provide more clarity on how these efforts unfold in the global economic landscape.
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