Seeds of Wisdom RV and Economic Updates Thursday Afternoon 8-28-25

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BRICS De-Dollarization Reversal: Focus Shifts to Local Currency Trade

The bloc abandons near-term plans for a unified BRICS currency, instead prioritizing local currency settlements and bilateral trade mechanisms.

Shift Away From a Unified Currency

The BRICS de-dollarization strategy has undergone a notable shift. Once expected to launch a single unified currency to rival the U.S. dollar, member states are now focusing on local currency trade systems and strengthening bilateral trade relationships.

This marks a reversal of earlier ambitions, reflecting a more measured, risk-averse approach to challenging the dollar’s dominance.

Putin Softens His Position

Russian President Vladimir Putin, once the strongest advocate for a BRICS common currency, has tempered his stance.

At the 2024 Kazan summit, he was seen holding a prototype BRICS banknote called the “Unit.” But more recent remarks suggest the bloc’s goals are narrower:

“The bloc’s goal was not to break away from the U.S.-dominated SWIFT financial system entirely, but rather to reduce the Dollar’s ‘weaponisation’ and promote the use of local currencies for trade between the BRICS members.”

Brazil Confirms No 2025 Currency Timeline

As BRICS president, Brazil confirmed there is no immediate timeline for a unified BRICS currency.

The Rio de Janeiro summit declaration (July 2025) outlined broad cooperation but omitted any currency launch dates.

This caution reflects concerns over market volatility, especially after President Trump’s return to the White House, which triggered currency depreciation across the yuan, ruble, real, rupee, and rand.

India Pushes Back on De-Dollarization

India has taken the firmest position against aggressive de-dollarization.

Foreign ministry spokesperson Randhir Jaiswal stated:

“De-dollarisation is not part of India’s financial agenda.”

Instead, India advocates a “derisking” strategy:

• Expanding trade in local currencies (e.g., deals with Russia, UAE, Maldives).

• Diversifying trade partners.

• Building alternative payment systems to reduce currency conversion risks.

Focus on Practical Mechanisms

With ambitions scaled back, BRICS is emphasizing realistic financial tools:

• BRICS Pay digital payment platform.

• New Development Bank as a financial stabilizer.

• Bilateral trade settlements in national currencies.

This gradualist approach underscores the bloc’s recognition that a radical break from dollar-based finance could destabilize global markets, while local mechanisms offer measured, sustainable progress.

 Key Takeaway

BRICS has pulled back from its boldest de-dollarization ambitions, shifting from a unified currency plan to localized trade solutions. By emphasizing stability and bilateral currency use, the bloc signals pragmatism — prioritizing gradual financial diversification over abrupt confrontation with the dollar.

Strategic Implications

• Dollar Challenge Delayed: The U.S. dollar’s global dominance faces no immediate threat, but localized settlements still chip away at its monopoly in trade finance.

• India as Power Broker: New Delhi’s push for “derisking” positions it as a moderating force, balancing ambition with market stability.

• Global Reset in Motion: Even without a BRICS currency, incremental steps toward local trade settlements lay the foundation for alternative financial infrastructures that could reshape global markets in the long run.

@ Newshounds News™
Source: Watcher Guru

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