Brazil has decided to abandon the proposal for a common BRICS currency during its presidency of the bloc this year. Instead, the country will focus on trade using local currencies to reduce dependence on the U.S. dollar. This decision comes as Brazil prepares to host the 17th BRICS Summit in Rio de Janeiro in July 2025.
Initially, President Luiz Inácio Lula da Silva supported a unified BRICS currency to challenge the dominance of the U.S. dollar. However, after internal discussions, Brazil chose to prioritize trade reforms that enhance transactions in local currencies. This approach aims to simplify cross-border payments and lower transaction costs without creating a new shared currency.
The decision also reflects external pressures, especially from the United States. Former U.S. President Donald Trump warned of 100% tariffs on BRICS members if they pursued an alternative to the dollar. This potential economic impact influenced Brazil’s shift away from the common currency proposal. Despite this, Brazil remains committed to reducing reliance on the U.S. dollar. Instead, it will work on improving cross-border payment systems. The upcoming BRICS Summit will discuss using blockchain technology and linking national payment infrastructures to make transactions smoother.
The idea of a unified BRICS currency has sparked different views within the bloc. Russia and China strongly support de-dollarization, with President Vladimir Putin pushing for an alternative payment system. In contrast, Brazil and India have raised concerns about economic instability and geopolitical risks.
Brazil’s decision to reject the BRICS common currency is a strategic move to balance national interests and international relations. By promoting trade through local currencies, Brazil aims to strengthen economic ties within BRICS while avoiding risks linked to challenging the U.S. dollar’s global influence.
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