Is De Dollarisation Gaining Ground How BRICS, India, and Chinas Digital Renminbi Are Reshaping Global Finance

Highlights:

• BRICS nations — led by India and China — are intensifying efforts toward de-dollarisation, with local currency trade and China’s digital renminbi (e-CNY) emerging as key tools.
• India’s rupee-based trade with Russia and China’s digital currency expansion are challenging the dominance of the U.S. dollar in global settlements.
• At the time of writing, the U.S. dollar remains the world’s leading reserve and trade currency, but experts say a gradual shift toward a multipolar financial order is clearly underway.

Major shift in global currency dynamics gains momentum

For decades, the United States dollar has been the dominant global currency — the backbone of international trade, reserves and financial power. But that dominance is now facing growing pressure. The BRICS bloc (Brazil, Russia, India, China, South Africa) along with expanding members are actively exploring non-dollar payment systems and local currency settlements.

The India-China-Russia Triangle & Digital RMB

In recent years, India has sought to settle more trade in Indian rupees and other local currencies — notably for its Russian oil imports — partly bypassing the dollar. Meanwhile, China is advancing its central bank digital currency (CBDC), the digital Renminbi (e-CNY), as a tool for cross-border payments and currency internationalisation. These moves combine to fuel an ascent of de-dollarisation — the shift away from dollar-dependence.

Payment Systems & Technical Barriers

The BRICS-driven alternative infrastructure — such as the proposed BRICS Pay and other national settlement platforms — seek to facilitate local-currency or digital currency trade between member states. However, progress remains uneven: regulatory divergence, capital-flow controls, currency convertibility and trust among partners continue to slow full implementation.

Is the Dollar Really Under Threat?

At the time of writing, the US dollar remains dominant in global reserves, trade invoicing and FX transactions. Scholars caution that while de-dollarisation is gathering momentum, a wholesale replacement of the dollar is far from immediate.

Why It Matters

• For the US: a gradual erosion of dollar dominance could weaken the potency of sanctions and the global financial leverage held by Washington.
• For developing economies: shifting to local-currency or digital-currency settlement may reduce exposure to dollar volatility and dependency.
• For global finance: the rise of CBDCs and regional settlement systems signal a multipolar currency landscape, altering long-established flows of capital and trade.
   

Bottom line: The intersection of BRICS ambition, India’s local-currency trade strategy and China’s e-Renminbi rollout points to a real de-dollarisation trend. But at the time of writing, the dollar’s primacy remains intact — the transformation is incremental, not revolutionary.

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