In recent months, US President Donald Trump has warned the BRICS group at least twice not to challenge the dominance of the US dollar.
"There will be no chance for BRICS to replace the US dollar in international trade, or anywhere else. Any country that tries to do that should say goodbye to the taxes and say goodbye to the United States," Trump warned last month.
An unnamed Brazilian official revealed that the idea of a common currency to replace the US dollar was not included in technical discussions by President Luiz Inacio Lula da Silva and other leaders at recent BRICS summits.
Instead, Brazil is promoting reforms in BRICS to facilitate international domestic currency transactions, opening up a downward trend of dependence on the US dollar in global trade, the three sources said.
"This is not for anyone," a source stressed, focusing on mitigating conflicts with global trade.
Three sources said that the agenda that the BRICS Chair 2025 focuses on includes researching technologies such as blockchain and linking payment systems to reduce transaction costs, complying with standards set by multilateral organizations such as the Bank for International payments (BIS).
"No one wants to cause trouble, but BRICS countries do not want to give up the intention of exploring this possibility," another source said, noting that no BRICS member country has any intention of giving up its US dollar reserves.
Last week, President Lula defended the BRICS countries' "right to discuss the establishment of trade forms that do not make us completely dependent on the US dollar". Also last week, the Brazilian Ministry of Finance and the Central Bank discussed proposals for this year's BRICS presidency, including cross-border payment initiatives.
Sources added that BRICS representatives will meet in South Africa this month on the sidelines of the G20 summit and Brazil will present plans for the BRICS summit scheduled for July.
BRICS was founded in 2009, with founding members Brazil, Russia, India, and China quickly adding South Africa. Recently, the BRICS group has added Egypt, Ethiopia, Indonesia, Iran, and the UAE.
Brazil has stood out in global payment discussions with the launch of the Pix spot payment system in late 2020. Pix is programmed in a way that can easily integrate with other payment systems, although governance challenges are still a significant barrier.
Brazil currently operates a domestic currency payment system (SML) managed by the central bank through agreements with Argentina, Uruguay and Paraguay.
The system allows transactions to be paid directly in Brazilian reais, ignoring the intermediary role of the USD and eliminating the need for foreign exchange contracts.
Although it helps reduce intermediary costs, payment by this system requires at least 3 working days, so it is less applied.
Argentina was the leading trade partner in SML transactions last year, contributing a total of 5.1 billion reais (878 million USD) - accounting for only a small part of the total bilateral trade value of 27.4 billion USD.
