Navigating the Shift: De-Dollarization, BRICS Strategies, and the Evolving Global Financial Architecture

Abstract

The global financial system, historically dominated by the US dollar since the 1944 Bretton Woods Agreement, is undergoing a significant transformation as BRICS nations (Brazil, Russia, India, China, and South Africa) pursue de-dollarization to reduce reliance on the dollar in trade, reserves, and financial systems. Driven by economic vulnerabilities, geopolitical tensions (e.g., sanctions and the Russia-Ukraine conflict), and technological innovations (e.g., cryptocurrencies and blockchain), these efforts aim to mitigate exposure to US monetary policy and dollar weaponization. BRICS strategies include promoting alternative currencies (e.g., China’s Renminbi), establishing parallel financial institutions (e.g., New Development Bank), and leveraging digital payment systems. However, challenges persist, such as the dollar’s entrenched dominance, internal BRICS divergences, and technical barriers. The shift suggests a gradual move toward a multipolar monetary system rather than an abrupt dollar collapse, with implications for global economic governance, financial stability, and geopolitical power dynamics. Case studies of China, Russia, and Pakistan highlight diverse approaches, from bilateral trade agreements to sectoral energy transitions. This research underscores de-dollarization as a complex, multidimensional process integrating economic, political, and technological factors, signaling an evolving but not yet displaced dollar-centric order.