Two Wrong Stories About BRICS
Most of what is written about BRICS is wrong in one of two directions.
The first wrong story comes from the alliance’s supporters and the financial press that covers them sympathetically. In this telling, BRICS is rapidly building a parallel financial system, the dollar is collapsing, a new BRICS currency is imminent, and the West is being eclipsed in real time. The narrative is dramatic, the predictions are confident, and almost none of it is supported by primary data.
The second wrong story comes from skeptics who treat the bloc as an empty acronym. In this telling, BRICS is a collection of mismatched countries with conflicting interests, no shared institutions of consequence, and no realistic prospect of changing global financial structures. This view ignores real expansion, real institutions, and real if gradual shifts in the data.
Neither story is accurate. The honest assessment of BRICS in 2026 sits between them, and the implications for investors are different from what either extreme suggests. This article walks through what the bloc has actually achieved, what it has failed to achieve, what the verified data on dollar dominance actually shows, and what reasonable conclusions investors should draw.
What BRICS Actually Is
The bloc currently has either 10 or 11 full members depending on whose announcement you accept. The original five: Brazil, Russia, India, China, and South Africa were joined in January 2024 by Egypt, Ethiopia, Iran, and the United Arab Emirates. Indonesia formally joined in January 2025. Saudi Arabia was invited in 2023 and has formally been treated as a member by some BRICS sources since mid-2025, but Saudi authorities themselves have remained ambiguous about full participation.
Beyond full membership, the bloc established a “partner country” tier in 2024. Ten partner countries currently hold this status: Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Nigeria, Thailand, Uganda, Uzbekistan, and Vietnam. Partner countries participate in selected BRICS meetings without holding full decision rights.
In aggregate, BRICS members and partners represent approximately 40 percent of global GDP measured by purchasing power parity, and roughly 45 percent of the world’s population. By comparison, the G7 represents about 28 percent of global GDP at PPP. The BRICS economic footprint is genuinely large.
But footprint is not coherence. The bloc spans countries with deeply different political systems, economic models, and strategic interests. China and India are direct geopolitical rivals along their disputed border and increasingly in the Indian Ocean. Russia and China are nominally close partners but historically wary neighbors. Brazil under different governments has alternated between Western alignment and Global South solidarity. The UAE and Iran are regional adversaries. Saudi Arabia and Iran maintain a fragile diplomatic normalization that could reverse at any time. Indonesia’s foreign policy is officially non-aligned. The bloc’s central operational principle turns these tensions into a structural constraint on what BRICS can actually do.
This is the first thing to understand about the bloc. It is large, growing, and meaningfully institutionalized. It is also held together by shared opposition to Western-led institutions rather than by shared positive vision, and the gap between those two is what determines whether any specific BRICS initiative succeeds or stalls.
The Case That BRICS Matters
The New Development Bank, founded in 2015, has approved roughly $32 to $43 billion in lending across 96 to 139 projects since inception, depending on which source’s figures you use. The lending focuses on infrastructure and sustainable development in member states, with a meaningful share denominated in local currencies rather than dollars. The bank is small compared to the World Bank but it is not symbolic. It exists, it lends, and the loans get repaid. Recent NDB lending has expanded to non-member borrowers and is increasingly funded in renminbi and other local currencies, which is a genuine if modest step away from dollar-denominated development finance.
The Contingent Reserve Arrangement, established in 2014, provides a $100 billion pool of currency reserves that members can draw on during balance-of-payments stress. The CRA has not been used in any major crisis, which is partially a sign of its limited size and partially a sign that members have preferred IMF facilities when they have needed them. But the institution exists and could be activated. Whether it would actually function under stress is untested.
Local-currency trade settlement has expanded meaningfully since 2022. Trade between Russia and China is now conducted overwhelmingly in renminbi and rubles rather than dollars, driven primarily by Western sanctions on Russia rather than by BRICS coordination. India and the UAE settle a growing share of oil trade in rupees and dirhams. Brazil and Argentina have expanded local-currency settlement for bilateral trade. None of these arrangements were created by BRICS as an institution, but the bloc provides a framework that legitimizes and accelerates them.
BRICS Pay, the proposed cross-border payment system that would link domestic payment networks across member states, is targeted for operational deployment at the September 2026 New Delhi summit. If it launches as advertised, it would allow direct settlement between member-state payment systems like Russia’s SPFS, China’s CIPS, India’s UPI, Brazil’s Pix without routing through SWIFT or the dollar-based correspondent banking system. The technical feasibility is real. Whether members can agree on governance, fees, and access rules is the actual question, and the track record on similar coordination challenges is mixed.
These are real institutions doing real things. They are not the parallel financial system that BRICS supporters describe, but they are also not nothing. Slow institutional construction over a decade tends to compound, and dismissing the bloc’s infrastructure because it is small today is the same mistake skeptics made about Chinese economic development in the 1990s.
Where the Hype Outruns the Data
The “BRICS Currency” Has Not Arrived
Coverage frequently suggests the bloc is launching a unified currency. It is not. The 2024 Kazan summit produced discussion of payment system alternatives, not a currency. The 2025 Rio summit added detail on local-currency settlement, again not a currency. India’s 2026 chairship has explicitly avoided pushing for a unified currency.
The reason is structural. A common currency requires unified monetary policy, fiscal coordination, and political integration. The eurozone took decades to build these and still struggles with them. BRICS has none of the prerequisites. India and China cannot agree on basic political alignment. Brazil and Russia operate at opposite ends of the political spectrum. A shared currency among countries with these differences is not a near-term possibility. Anyone telling you otherwise is selling something.
The Renminbi Has Not Gained Ground
If the dollar were being replaced as a reserve currency, the renminbi would be the natural beneficiary. The data shows this is not happening.
According to the IMF’s Currency Composition of Official Foreign Exchange Reserves, the renminbi accounted for 1.93 percent of global reserves in the third quarter of 2025. That figure was 1.99 percent in the second quarter. The renminbi’s share of global reserves has been roughly flat at around 2 percent for several years and actually declined modestly through 2025.
This matters because reserve currency status is the single hardest test of de-dollarization claims. If China’s currency cannot break through 2 percent of global reserves while the country’s economy approaches the size of the United States, the structural barriers to dethroning the dollar are clearly enormous. Capital controls, limited financial market depth, and political risk all matter more than economic size.
BRICS Pay Remains a Plan
The cross-border payment system has been “targeted” for launch at multiple summits across multiple years. The September 2026 New Delhi summit is the latest target. Until it operates at scale, BRICS Pay is a proposal, not infrastructure.
Similar projects elsewhere offer a useful comparison. The European Union’s instant payment systems took years to roll out across member states. India’s UPI required substantial regulatory and technical groundwork before it functioned reliably. BRICS Pay must coordinate across more countries with less institutional alignment than either of these. The launch may happen on schedule. It may also slip again.
What the Dollar Data Actually Shows
The dollar’s role in the global financial system is the central question behind most BRICS coverage. The verified data tells a more nuanced story than either side of the debate suggests.
A Real Decline, Slowly
The IMF’s COFER dataset is the gold-standard source on currency reserves. Its most recent figures, for the third quarter of 2025, show the dollar accounting for 56.92 percent of global central bank reserves.
That figure has fallen meaningfully over time. In 1999, the dollar’s share was 71.19 percent. The decline has been gradual and almost continuous. From the first quarter of 2017 to the third quarter of 2025, the dollar’s share dropped from 64.69 percent to 56.92 percent, a decline of nearly 8 percentage points across eight years.
The trend is real. The pace is slow. At the current rate of decline, the dollar would still account for roughly half of global reserves in 2035. This is hardly a collapse.
Most of the Recent Decline Reflects Exchange Rates
The IMF itself has flagged a critical caveat in its 2025 analysis. Most of the dollar’s recent share decline reflects exchange-rate effects rather than active diversification by central banks. The mechanism is straightforward. COFER reports reserves in dollar terms. When the dollar weakens against other currencies, the dollar value of non-dollar reserves rises automatically. The dollar’s share of the total then appears to decline, even if no central bank actually changed its holdings.
According to IMF analysis, exchange-rate effects drove nearly all the dollar share decline in the second quarter of 2025. Once these effects are stripped out, the dollar’s share has been “basically unchanged since 2022,” according to a Federal Reserve note. This does not eliminate the decline. The longer trend from 71 percent to 57 percent over twenty-five years is real. But it does mean the recent year-by-year drops have been smaller than they appear, and the de-dollarization narrative based on quarter-to-quarter share changes is largely a misreading of how the data is constructed.
The Dollar Still Dominates Trade and Finance
Reserve composition is one measure. Other measures show the dollar’s role is even larger.
The dollar is used in 89 percent of global foreign exchange transactions, according to the Bank for International Settlements. That share has barely changed in two decades. International trade invoicing remains dominated by the dollar, particularly in commodities and major manufactured goods. Roughly half of all international debt is dollar-denominated.
These figures are not just about reserves held by central banks. They reflect what private firms, banks, and governments actually use to conduct global business. By these measures, the dollar’s role is essentially unchanged from a decade ago.
The reserve share decline is real but partial. The transactional dominance of the dollar is intact. Both facts are true. Articles claiming dollar collapse cite the first and ignore the second. Articles claiming nothing has changed do the opposite.
The Internal Contradictions
BRICS faces a structural problem that the bloc’s supporters rarely acknowledge. Its members do not agree on what it is for.
China Wants a Counterweight to the West
China’s strategic interest in BRICS is clear. The bloc gives Beijing diplomatic legitimacy, a platform for renminbi internationalization, and a vehicle for projecting influence into the Global South. China’s vision is for BRICS to become a genuine alternative to Western-led institutions, with Chinese financial infrastructure at its center.
India Wants Strategic Autonomy
India’s interests are different. New Delhi sees BRICS as one of several diplomatic forums that preserve its strategic autonomy between East and West. India does not want to be inside an explicitly anti-Western bloc, because India simultaneously maintains close defense ties with the United States, France, and Israel. India also has direct territorial disputes with China and views Chinese leadership of BRICS as a problem to be managed rather than embraced.
Brazil Oscillates
Brazil’s foreign policy moves between Global South solidarity and Western alignment depending on which government holds power. Lula’s government has emphasized BRICS engagement. A future Brazilian government with different priorities could shift the country’s posture significantly. The same dynamic affects Argentina, Mexico, and other Latin American countries that have flirted with BRICS membership.
The New Members Add More Tensions
The 2024-2025 expansion increased these tensions rather than resolving them. Iran is in active confrontation with the United States and Israel. The UAE maintains close ties with the United States and Israel. Egypt depends on US security assistance. Saudi Arabia balances complex relationships with Washington, Beijing, and Tehran. Indonesia is officially non-aligned but cooperates militarily with the United States and Australia.
The bloc’s consensus rule means any member can block any meaningful decision. The more members, the harder consensus becomes. BRICS expansion has made the bloc larger and more representative of the Global South, but it has also made coherent action harder, not easier.
What This Means for Investors
The implications for portfolio construction are moderate, not dramatic.
The dollar will probably continue its gradual decline as a reserve currency. This trend is real and has been operating for over two decades. Central banks are slowly diversifying into a wider range of currencies, including the euro, gold, and a long tail of smaller currencies. The renminbi is not the primary beneficiary. Investors with very long horizons should expect the dollar’s role to keep eroding gradually rather than collapsing suddenly.
This argues for the kind of diversification the global diversification article on this site already discussed. Currency exposure across major reserve currencies is one form of protection. Gold has played a partial role and may continue to. Emerging market exposure provides indirect participation in the structural shift, though with substantially higher volatility than developed markets.
What the data does not support is positioning for a dramatic dollar collapse. Trades built around imminent reserve currency rotation, BRICS currency launches, or rapid renminbi internationalization have repeatedly disappointed. The structural barriers are too high and the pace is too slow for these positions to pay off on the timelines investors typically operate within.
The opposite extreme also misreads the data. Twenty-five years of gradual reserve currency diversification is a real shift. The accumulation of small institutional steps within BRICS is a real shift. Investors who treat the dollar as permanent and unchallenged are also positioned wrongly.
The middle position is the accurate one. Slow, structural, real change, no imminent revolution. Plan for the long arc rather than the headline.
Conclusion
BRICS in 2026 is real but not what its rhetoric suggests. The bloc has built genuine institutions, expanded its membership meaningfully, and accelerated trends in local-currency settlement that were already underway. It has also failed to deliver a common currency, failed to lift the renminbi to meaningful reserve status, and remained internally divided in ways that constrain what coordinated action it can take.
The dollar’s role in the global financial system is eroding gradually. The decline is real and has been underway for decades. The pace is slower than headline coverage suggests, and the renminbi has not been the beneficiary anyone expected. Most of the recent year-on-year share movements reflect exchange rate effects rather than active diversification.
The honest framing is that BRICS represents the slow, partial reorganization of a global financial system that was always going to evolve as economic weight shifted toward the Global South. It does not represent the imminent end of dollar dominance, the construction of a parallel financial system, or any of the more dramatic claims that fill the coverage of the bloc.
For investors, the correct response is neither alarm nor dismissal. The trend is real. The pace is slow. Portfolio decisions should reflect both facts. Anyone presenting BRICS as either a revolution or a non-event is either selling a narrative or has not looked at the data.