Brazil has announced that BRICS will not advance with a common currency in 2025, diverting towards initiatives aimed at lowering reliance on the US dollar. President Trump has warned of significant tariffs for nations attempting to challenge the dollar’s dominance. Brazil will instead explore trade reforms using local currencies, emphasizing efficiency without confrontation.
Under Brazil’s leadership in 2025, BRICS has decided not to pursue a joint currency this year, despite previous discussions suggesting otherwise. The organization’s focus may instead be directed toward decreasing reliance on the US dollar in international trade, a move that has prompted warnings from US President Donald Trump, who asserts that attempts to challenge the dollar will face significant consequences.
Trump cautioned BRICS nations that any efforts to diminish their dollar dependence could result in the imposition of tariffs. He stated, “There is no chance that BRICS will replace the U.S. dollar in international trade… any country that tries should say hello to tariffs, and goodbye to America!” He went on to express a lack of concern about BRICS’ intentions, suggesting that nations should be wary of discussing alternatives to the dollar.
Previously, Brazilian President Luiz Inácio Lula da Silva had considered the establishment of a BRICS currency, but Brazilian officials clarified that such proposals have not been formally debated. Instead, Brazil aims to reform BRICS to facilitate trade using local currencies, thereby minimizing dependence on the dollar without direct opposition. Officials emphasized the initiative is not confrontational and is focused on enhancing trade efficiency.
To support this agenda, Brazil plans to explore various measures, including: (i) Implementing blockchain technologies to improve cross-border transactions, (ii) Linking existing payment systems to reduce transaction costs, and (iii) Adhering to financial standards set by multilateral organizations like the Bank for International Settlements (BIS).
Although there are discussions on alternative trade mechanisms, BRICS members do not plan to divest from their dollar reserves, and President Lula has noted a shift in his rhetoric regarding a common BRICS currency. Nonetheless, he remains committed to developing methods to lessen total dependency on the US dollar. Brazil’s finance ministry and central bank have convened to strategize on BRICS initiatives, with representatives from member nations slated to meet in South Africa to discuss plans for the forthcoming BRICS Summit.
In summary, Brazil has opted against pursuing a common currency during its presidency of BRICS in 2025. The focus will instead shift toward enhancing trade using local currencies and reducing reliance on the US dollar, all while maintaining existing dollar reserves. President Trump has issued severe warnings regarding any challenges to the dollar, reinforcing the political complexities surrounding these discussions.
Original Source: swarajyamag.com
