To give this some context, the share of the US dollar in Russia–China bilateral trade settlement fell from nearly 90 percent in 2015 to 46 percent in 2020 ( Reference SimesSimes, 2020). Footnote 1 It is also an open question whether the accelerated de-dollarization process in Russia and China, triggered by their growing tensions with the United States, is only a temporary change, or whether it forms a broader paradigm shift in global finance. The NDB’s commitment to using local currency finance rather than solely relying on the US dollar is merely the tip of the iceberg of BRICS’ de-dollarization initiatives. As such, the dollar’s power and prestige have been central to American global leadership (see also Reference Helleiner and KirshnerHelleiner and Kirshner, 2009, p. 1).
The US dollar is the dominant currency in the global financial and monetary system and affects various aspects of global affairs. Yet the stakes of BRICS’ de-dollarization initiatives are particularly high. BRICS’ foremost achievements have been in the area of financial cooperation, as evidenced by the establishment of the New Development Bank (NDB), the Contingent Reserve Arrangement (CRA), and various other financial coordination mechanisms.ĭespite the breadth of the BRICS countries’ financial cooperation and their growing interconnectedness, BRICS’ activities in the monetary realm have been understudied.
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In 2009, Russian President Reference MedvedevDmitry Medvedev (2009) hosted the first BRIC (Brazil, Russia, India, China) Summit in Yekaterinburg to explore how to “overcome the crisis and establish a fairer international system … and discuss the parameters for a new financial system.” Since South Africa joined BRIC in 2010, transforming BRIC into BRICS, the five members have achieved policy coordination in over seventy issue areas ( Reference Kirton and LarionovaKirton and Larionova, 2018 Brazil MFA, 2020). This crisis also created an opportunity for rising powers to seek greater status and representation in global governance. The fact that this crisis originated in the United States raised concerns about the reliability of US leadership and the rationality of preserving the dollar’s hegemonic position in the global financial system. The US dollar’s supremacy and US global leadership have been increasingly questioned since the 2007–2008 global financial crisis. This title is also available as Open Access on Cambridge Core. They find that BRICS' coalitional de-dollarization initiatives have established critical infrastructure for a prospective alternative nondollar global financial system. The authors employ process tracing, content analysis, semi-structured interviews, archival research, and statistical analysis of quantitative market data to analyze BRICS activities during 2009-2021. This framework identifies the leaders and followers of the BRICS de-dollarization coalition, assesses its robustness, and discerns how BRICS mobilizes other stakeholders.
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To fill this gap, this study develops a 'Pathways to De-dollarization' framework and applies it to analyze the institutional and market mechanisms that BRICS countries have created at the BRICS, sub-BRICS, and BRICS Plus levels.
Existing scholarship has not systematically examined BRICS (Brazil-Russia-India-China-South Africa) as a rising power de-dollarization coalition, despite the group developing multiple de-dollarization initiatives to reduce currency risk and bypass US sanctions.
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