BRICS’ New Currency: 3 Make-or-Break Hurdles Before Launch

The BRICS bloc wants to dethrone the dollar—but first, it needs to clear three critical roadblocks. Here’s what stands between ambition and reality.

1. Economic Parity or Bust

Member nations must align their wildly divergent economies. Good luck harmonizing inflation rates when one country’s currency is crumbling and another’s is pegged to the dollar.

2. The Trust Factor

Convincing global markets to trust a currency backed by a geopolitical bloc—not a single sovereign—is like selling ice to Eskimos. Especially when two members are currently under sanctions.

3. Infrastructure or Illusion?

Without a SWIFT alternative or unified digital rails, this ‘currency’ risks being another petro-yuan fantasy—all headlines, no liquidity. (Cue eye rolls from forex traders.)

Bottom line: BRICS can dream big, but until these conditions are met, their currency play is just another entry in the ledger of financial pipe dreams.

What Conditions Must Be Met For the BRICS Currency To Work?

To successfully launch and maintain a new currency in the forex markets, BRICS must consider three important factors. Agreed, that adding a new currency in the markets is a herculean task, but it’s not impossible to make it work. If the alliance members begin using the tender for trade and also include non-members for settlements, the US dollar will be on the path of decline.

First and foremost, BRICS must review the global macroeconomic and budgetary factors and closely coordinate trade policies. Participating countries must rewrite old trade deals and forge new ones, circling the currency to give it strength. The new tender will gain stability when it starts on the front foot and not depend on the market’s whiplash. Having the support of the alliance from the beginning, the tender will gain trust from other countries to use it for cross-border transactions.

A robust and state-of-the-art monetary management nothing less than a central bank, must be established. Strong institutions must be involved in money management, similar to the work of a country’s central bank. Only this around, the central bank is consensus-based based involving the work of 10 countries. A central bank governing the BRICS currency will give it a shot in the arm, enabling it to go global.

BRICS must announce an unrestricted FLOW of goods, services, and capital to countries that use the currency. Developing countries have more to benefit than lose out, as it could be a key to driving economic growth. The bloc must also write a new framework where emerging economies will be rewarded for taking advantage of the currency. The Western-dominated financial system will come crumbling down if these three conditions are met.