The Architecture of Money · Part 9
BRICS and the Dollar: Escape the USD, or Find Another Path?
Not “USD or BRICS,” but more paths. Tariff threats, record gold buying and the real test.
There is a story repeated again and again: BRICS will create a new currency and defeat the dollar.
I am not sure things are that simple. And that is exactly why I find this story interesting.
1. What Did Trump Say?
On November 30, 2024, then President-elect Donald Trump warned BRICS countries that if they created a new currency or backed another currency to replace the U.S. dollar, they would face 100% tariffs and should expect to lose access to the U.S. market.
That was a very strong statement.
But the question is: what does BRICS actually want?
2. A Common Currency?
Here we need to separate different things.
BRICS members have discussed for years:
- settling trade in local currencies
- reducing dependence on the dollar in certain transactions
- cross-border payment systems
- financial cooperation.
None of that means BRICS already has a common currency that replaces the dollar.
Those are two completely different things.
3. I See the Problem Differently
I do not think the biggest question is “will BRICS defeat the dollar?”
The more interesting question is:
How many additional paths can countries build to trade without using the dollar in every situation?
A system does not have to eliminate the dollar. It only needs to reduce dependence on it in certain places.
4. The Gold Signal
Central banks keep buying gold.
The World Gold Council reported that central banks added 1,045 tonnes of gold in 2024, the third year in a row above 1,000 tonnes. Poland’s central bank was the largest buyer, with Türkiye, India and China also among notable buyers.
Why? There are many possible reasons: diversification, reserve management, geopolitical risk, confidence.
We do not need to conclude “they are attacking the dollar.”
Part of the explanation may be simpler: countries do not want all their reserve assets in one basket.
5. BRICS Does Not Need to “Kill the Dollar”
A dominant currency system does not disappear because a group of countries announces it wants less dependence.
To replace the dollar, you need:
- deep capital markets
- huge liquidity
- safe assets
- convertibility
- payment systems
- legal confidence
- a reliable store of value
- international network effects.
That is why this story will not end at a single BRICS summit.
6. A More Multipolar World?
Maybe the future is not “USD or BRICS.”
Maybe it is USD + euro + renminbi + gold + digital assets + regional payment systems.
A more multipolar world.
And if one day a new currency claimed to be backed by gold, the story would become even more interesting. That is Part 10.
What This Means for Your Money
Headlines about BRICS and the end of the dollar are often used to sell fear, and sometimes to sell gold or “dollar-collapse” products at high markups.
If you send money abroad, you already have concrete rights. The CFPB says providers must give you specific information, including fees and taxes, before an international transfer, and must investigate errors you report.
One step this week: ignore predictions, check your own exposure. If you have high-interest debt, paying it down is a sure return no currency forecast can beat. Our debt payoff calculator shows how fast.
Sources: PBS NewsHour, “Trump threatens 100 percent tariff on BRICS nations if they try to undermine U.S. dollar” (Nov. 30, 2024); World Gold Council, Gold Demand Trends Full Year 2024: Central Banks; CFPB, “Money transfers”.
This is Part 9 of The Architecture of Money, a DebtRoute series on how money really works. Next: What If a New Currency Were Gold-Backed?. Follow DebtRoute on Facebook or join the DebtRoute Discord to get the next part. Educational content, not financial advice. Images are illustrative. DebtRoute is not affiliated with BRICS member governments or the World Gold Council.