Many expected that the 18th BRICS (Brazil, Russia, India, China and South Africa) summit, held in New Delhi from September 12 to 13, 2026, would mark the bloc’s transition from rhetoric to a concrete challenge to the dollar. This is wrong. The New Delhi Declaration committed participants to expanding local currency trade and interoperable payment systems, including BRICS Pay, but did not propose a common currency.
The joint statement by the BRICS finance ministers and central bank governors on the eve of the summit was equally cautious. This caution reflects a deeper reality shaping BRICS monetary ambitions from 2022: the freezing of hundreds of billions of dollars of Russian sovereign reserves and the exclusion of Russian banks from much of the Western financial system have shown governments in the Global South that dollar reserves are not just financial assets, but can also become instruments of geopolitical influence. Political dissatisfaction with dedollarization is very real. The economic case for a massive money gap is much weaker.
Commentary on BRICS oscillates between predictions of an imminent dollar collapse and dismissive Western complacency. The greater reality lies in between. BRICS seeks to reduce the influence of its members on a system in which access to a dominant currency can have geopolitical consequences. However, reducing dependence on the dollar is not the same as replacing it. The bloc’s alternative channels for trade, payments and development finance remain constrained by trade imbalances, convertibility restrictions and shallow financial markets. The New Delhi summit did little to address these limitations, no matter how ambitious its statements about payment systems were.
The most common mistake in the BRICS debate is to conflate the transaction currency with the reserve currency. Bilateral trade carried out in national currencies, i.e. in rupees, rubles or yuan, can reduce dollar dependence in individual transactions and provide some protection from sanctions. By itself, it does not create a self-sustaining international monetary system.
A reserve currency requires deep, liquid financial markets, broad convertibility, and a large number of safe assets that foreign governments can hold. Triffin’s dilemma captures part of the problem: the currency that serves as the world’s primary liquidity asset must be supplied abroad on a continuous basis, creating pressures that most BRICS members are unable or unwilling to bear. China clearly demonstrates this. This is the bloc’s economic center of gravity, but it also has a structural surplus. The yuan may become a currency of account, but it will not be as attractive a reserve asset given Beijing’s restrictions on capital account convertibility.
Oil trade between India and Russia after 2022 makes the problem concrete. As trade expanded and payments moved beyond the dollar, Russian exporters accumulated rupee balances with Indian banks that peaked at $39 billion, according to Reuters. Russian Foreign Minister Sergei Lavrov acknowledged this in 2023, telling reporters in Goa that “this is a problem” and that the rupees needed to be converted before Moscow could use them. India’s large trade deficit with Russia limited Moscow’s ability to recycle surpluses through imports, while capital account restrictions limited their wider use. Removing the dollar from a transaction does not eliminate the need for a claims settlement mechanism. Moscow’s subsequent switch to the yuan and UAE dirham changed the settlement currency in some transactions; this didn’t solve the underlying problem. BRICS Pay does not solve this problem either, as interoperable payment systems cannot create convertible or investable assets on their own.
Capital market leash
The same constraint shapes the institutions created as alternatives to Western-dominated development finance. The New Development Bank (NDB) and the Reserve Fund were created to give developing countries greater institutional autonomy. But institutional independence does not mean operating outside the global financial system.
The NDB needs access to international capital markets to expand lending beyond membership subscriptions, making it sensitive to investor views and credit ratings. Days after Russia’s invasion of Ukraine, the NDB announced that it had “suspended new transactions in Russia” amid “growing uncertainty and restrictions”, reflecting restrictions imposed by its own financial position and its access to international capital markets. One of the founders discovered that the bank he had helped create could not continue to operate with him once geopolitical restrictions collided with his financial obligations. This does not make the NBR irrelevant; it marks the line between institutional diversification and true financial independence.
India Estimated Distance
This places New Delhi at the center of delicate calculations, as seen in its high-level diplomacy. External Affairs Minister S. Jaishankar has repeatedly said that “there is no proposal to create a BRICS currency” and that the group is “not at all interested in weakening the US dollar.” India maintained this position even during the summit dedicated to expanding the non-dollar payment infrastructure. India’s relationship with China remains marked by significant trade asymmetries, while its broader interests remain deeply tied to the US, Europe and the Gulf countries. A BRICS currency built on the financial infrastructure of one member could raise concentration concerns that New Delhi is not interested in.
Prime Minister Narendra Modi shares a moment with Russian President Vladimir Putin as Chinese President Xi Jinping watches the second day of the BRICS summit in New Delhi, India, September 13, 2026. | Photo Credit: Press Information Bureau of India/Handout via Reuters
Thus, India’s approach has been gradual: greater international use of the rupee, cross-border digital payment channels, and bilateral mechanisms that reduce the use of the dollar in individual transactions, while avoiding a single BRICS currency or an antagonistic bloc. Bilateral agreements can reduce specific vulnerabilities, but they alone cannot create the scale, liquidity, and network effects needed for a truly diversified monetary system.
In any case, BRICS members do not form a single political economy. They include commodity exporters, manufacturers, energy producers and services countries whose financial systems and capital controls diverge sharply, a divergence Jaishankar himself acknowledged, noting that BRICS members take “very different positions” on the currency issue.
The New Delhi summit did not lead to a sudden monetary revolution, and BRICS does not need one to change the current system. Bilateral trade may increasingly be carried out in national currencies; central banks can diversify reserves; payment systems such as BRICS Pay can develop outside Western channels. None of these on their own displaces the dollar. Taken together, this could reduce the number of transactions for which the dollar is indispensable.
The New Delhi Declaration will likely be seen over time not as a step towards replacing the dollar, but as confirmation that the dollar’s dominance is becoming less exclusive. This may be a more meaningful form of dedollarization: not a new order, but enough alternatives to make dependence on the old less automatic. The dollar remained the summit’s unspecified center of gravity, even as the hosts put systems in place to accommodate less need for it.
Tarun Agarwal is a Policy Research Fellow at the Indian International Studies Association, New Delhi.
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