BRICS: Can China Finally Advance Dollarization?

In 2027, China will take over the presidency of the BRICS. This will give it the opportunity to revive initiatives aimed at reducing dependence on the dollar. Beijing is expected to favor payments in local currencies and the interconnection of financial systems; however, no official roadmap has been defined for replacing the US currency.

In Brief

• China will take the presidency of the BRICS in 2027 and could revive dollarization initiatives.
• Beijing is expected to prioritize payments in local currencies and the interconnection of financial systems.
• The BRICS do not plan, at this stage, to create a common currency to replace the dollar.
• Diverging interests among members limit the scope of a coordinated monetary offensive.
• The 2027 summit will determine whether China can turn these discussions into concrete infrastructures.

What Beijing Could Bring to the Table in 2027

Next year, China will host the 19th BRICS summit. Xi Jinping has promised to work with other member countries to open a "third golden decade" of cooperation as per the New Delhi meeting. The Chinese president has notably mentioned artificial intelligence, governance reform, and the digital industry, without mentioning a common currency project.

However, Sergei Ryabkov, the Russian Deputy Foreign Minister, believes that the Chinese presidency would give a new impetus to the alliance's financial projects. He stated:

Disruptive technologies, with artificial intelligence at their core, supply chains, the modern payment and finance system, as well as logistical issues should be at the center of the Chinese presidency.

Russia confirms that it will support these priorities. Various issues would thus progress under Beijing's leadership:

• The interconnection of rapid payment systems used by member countries;
• Settling a larger share of trade in national currencies;
• Compatibility between central bank digital currencies;
• Local currency financing by the New Development Bank.

These arrangements could bypass the dollar in certain transactions without seeking to replace it globally.

The BRICS Move Forward Without Creating a Common Currency

Such a gradual strategy was confirmed by the New Delhi summit in September 2026. The final declaration further encourages the use of local currencies for trade and investment while recognizing that no single solution can suit all members. It also wishes for the BRICS Payment Task Force to study better compatibility between their payment infrastructures.

This orientation does not correspond to the creation of a "BRICS dollar." Moreover, India has dismissed the existence of a common currency project. New Delhi favors bilateral agreements that allow, for example, certain imports to be settled immediately in rupees, yuan, or dirhams.

Sanjay Malhotra, the governor of the Reserve Bank of India, confirmed last August that various solutions remain under consideration. He explained: "Different options are on the table, but they are still in the discussion stage, particularly central bank digital currencies and the interconnection of fast payment systems."

This distinction is crucial. Increasing the use of national currencies reduces the demand for dollars for certain commercial transactions. In contrast, a common currency would require shared monetary rules, an issuing institution, and mechanisms to manage economic imbalances among participants.

Internal Divisions Will Limit the Offensive Against the Dollar

China has many reasons to promote the internationalization of the yuan. Increased use of its currency could reduce its companies' exposure to U.S. sanctions and consolidate Beijing's influence over global South trade flows. Russia and Iran, already subject to Western restrictions, also have an interest in developing alternative circuits.

However, not all BRICS members share the same urgency. India, the United Arab Emirates, and Brazil maintain significant financial ties with the United States. They wish to reduce the costs of international payments without transforming the group into a monetary alliance explicitly hostile to Washington.

BRICS decisions are also based on consensus. The declaration from New Delhi, adopted despite divergences among several members, illustrates the need to find acceptable formulations for all. This rule decreases the likelihood that a radical project to replace the dollar will be quickly adopted.

The Chinese presidency could thus accelerate dedollarization in the most concrete sense: more exchanges in local currencies and better-connected payment systems. In contrast, the scenario of a common currency capable of directly competing with the dollar remains distant. The challenge of the 2027 summit will be to see if Beijing transforms current discussions into usable large-scale infrastructures.