BRICS+ countries should press ahead with a joint cross-border payments mechanism to reduce reliance on the US dollar, but a shared currency would face major economic and institutional obstacles, a think tank report said on Friday.
The paper, published by non-profit policy platform BRICS+ Thinking, urged the expanded grouping of major emerging economies led by Brazil, Russia, India, China and South Africa to commit to such a mechanism and take the steps needed to make it work.
“It is absolutely crucial that their central banks embrace this goal and make sure that all the technical requirements are put in place to allow this mechanism to function,” said authors Gregory T. Chin, Danny Quah and Jim O’Neill, the former Goldman Sachs economist who coined the BRICS acronym.
Cross-border payments have long been on the BRICS agenda, though efforts to integrate members’ financial infrastructure have made limited progress.
In a declaration issued after their September summit in India, BRICS leaders said they would continue work on faster, cheaper cross-border payments, including by linking payment systems and increasing the use of local currencies.
Introducing a shared currency, meanwhile, would require “dramatic reforms” across the group, including greater central bank independence, a common monetary authority and fewer restrictions on capital flows.
“The initial prognosis for the possibility of a BRICS+ currency is not hopeful,” the authors said, adding that it would have to be freely convertible both domestically and internationally, a difficult requirement under current policies.
“This is daunting enough but further significant challenges include how these countries are geographically dispersed and how they show no enthusiasm for delegating policy autonomy to a common central bank.”
The prospect of a BRICS currency has drawn criticism from US President Donald Trump, who has repeatedly threatened 100% tariffs on member states if they create a common currency or back an alternative to the US dollar.
BRICS does not have a common currency, and members including Russia and India have played down the prospect. However, efforts to reduce reliance on the dollar have gathered pace globally since Western sanctions were imposed on Russia following its 2022 full-scale invasion of Ukraine.
