Leaders from the economies of Brazil, Russia, India, China, and South Africa (BRICS) are gathering in South Africa for the 15th summit to discuss de-dollarization. Several leaders insist the goal is not an anti-West tirade but a means to reduce the dollar’s role in international trade.

South Africa’s finance minister told reporters the quest is to fund developments in BRICS countries with local money. Long-term, the bloc leaders want to increase trade in their own currencies.

In addition, there have been discussions around a common currency they could adopt for international trade. So far, South Africa has resisted withdrawing from SWIFT and reducing its use of the dollar.

In April, China and Brazil dumped the US dollar to conduct international trade in their respective currencies. Two months later, sanctions against Russia prompted China to explore expanding the renminbi’s use in international trade.

Around the same time, India and Malaysia agreed to settle international trade with the Indian rupee. Conducting business in local currencies eliminates the need for dollar conversion.

Despite their discussions, BRICS leaders insist the dollar’s role will not diminish soon.

Much of the dollar’s dominance comes from its stable value, the strength of the US economy, and the country’s geopolitical power. At a 1944 meeting in Bretton Woods, New Hampshire, global delegates made the greenback the standard for international exchange rates.

Countries could regulate buy or sell their currencies if they deviated from the dollar. The Bretton Woods Agreement also christened the dollar as the world’s gold-backed reserve currency.

When President Nixon severed the dollar’s gold backing in 1971, global currencies no longer had a reliable peg to fix exchange rates. Instead of the precious metal, many international forces in politics and finance set the dollar rate countries can benchmark their currencies against.

Read more about the US banking crisis here.

In June, BNP Paribas SA said market conditions are ripe for a slow demise of the US dollar. Recent strained geopolitical ties, soaring national debt, and the collapses of several banking institutions this year have tested the greenback’s resilience.

A new poll from the Associated Press-NORC Center for Public Affairs Research found only 36% of US adults support President Joe Biden’s economic leadership. 

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