Will BRICS Emerge as a Geopolitical Bigwig in 2026?
February 1, 2026—BRICS, an informal international organization of emerging market nations, lost some clout last year amid internal growing pains, external threats of tariffs from the world’s largest economy, and a dead-end attempt to offer an alternative to the U.S. dollar. Will this year be any different?
The bloc includes major political players, such as its founding members Brazil, Russia, India, China, and South Africa. Last year, its membership grew to ten. The economic and geopolitical bloc now includes: Saudi Arabia, United Arab Emirates, Egypt, Ethiopia, Indonesia, and Iran.
If members unify around common objectives, BRICS could reemerge this year as a geopolitical player. However, some observers consider it no contender given the strength of U.S. hegemony.
India’s Idea on Digital Currency Convergence
This year, under the leadership of Indian Prime Minister Narendra Modi, the bloc could revive plans to unite emerging economies. At the top of India’s list is the idea of uniting digital currencies as a strategic asset. In an exclusive story, Reuters reported, the Reserve Bank of India proposes to link India’s digital currency, the e-rupee, with digital currencies held by other central banks. All five original BRICS members are running pilot projects for digital currencies, such as China’s digital yuan and India’s e-rupee. Sponsors pitch the central bank digital currencies as “a safer, more regulated alternative” to stablecoins, Reuters reported. Unlike stablecoins, they are backed by governments.
India’s central bank recommended to the government a plan to unify members’ official central bank digital currencies. That could facilitate more cross-border trade and tourism transactions in the local currencies. If the Indian government accepts the plan, it could put it on the agenda for the annual BRICS Summit that India is hosting later this year.
‘Not for De-Dollarization’
Supporters say the goal is not de-dollarization—a plan floated last year under Brazil’s leadership and later rejected as unfeasible. At last year’s summit in Brazil, de-dollarization was a popular topic, particularly among those nations facing threats of U.S. tariffs, sanctions, secondary sanctions, or economic coercion. U.S. President Donald Trump hit back at the suggestion with threats of tariffs.
Ironically, it is the threat of tariffs and economic sanctions that motivates countries to seek alternatives to the U.S. dollar dominance. That is especially the case in the Global South, a strategic bloc of countries seeking influence through coordination.
“We are tired of being subordinate to the North. We want independence in our policies, we want freer trade—and things are progressing wonderfully. We are even discussing the possibility of creating our own currency, or perhaps using each country’s national currency for trade, without relying on the dollar,” Brazil’s President Lulu said last July.
(See reporting by Agencia Brasil for more on President Lulu’s comments last July.)
India’s Digital e-Rupee
If India pitches BRICS to align with its digital e-Rupee, it won’t be the first time the country promoted its system abroad. In 2023, Indian Prime Minister Narendra Modi encouraged G20 delegates meeting in Bengaluru make use of the currency. Furthermore, he promoted it for use abroad. Notably, the e-Rupee is built upon an India Stack system, a high-tech infrastructure that includes a biometric digital ID system. Since then, more central banks have launched or are in the process of creating digital currencies.
Linking Up Digital Currencies
Linking up digital currencies could create cost efficiencies, especially for the tourism industry and small businesses. However, even that goal—one much more modest than a single currency—could be tough to accomplish. Aligning digital currencies across international markets would require:
- consistent governance rules,
- interoperable technology, and
- a mechanism to settle imbalanced trade volumes,
That last point may be the most complex issue to address.
Trading in Local Currencies
BRICS members are increasingly trading with other nations in local currencies. For example, by November 2025, Russia and China settled 99 percent of their bilateral trade in either the yuan or the ruble, according to Politics Today.
The primary trouble in local-currency trade comes when there is an imbalance. One country could end up with an excess of another country’s local currency and have no use for it. Karthik Sankaran, a senior fellow on geoeconomics in the Global South Program at the Quincy Institute for Responsible Statecraft, said the U.S. dollar is the dominant currency for cross-border transactions globally.
“I can see a system where countries can trade with each other using local currency as long as the imbalances in trade are not so big,” Sankaran said in an interview with the GER.
Dollar Dominance
The U.S. dollar remains the top choice for settling trades, including as an intermediary currency between two other currencies. The U.S. dollar accounts for about 59 percent of global foreign exchange. That means trade and debt are settled in U.S. dollars.
De-Dollarization? Maybe, But Not Soon
As for de-dollarization, Sankaran does not see that happening in terms of its dominance as a currency of trade in the near term. Of all the BRICS countries, China’s renminbi stands the strongest chances of gaining greater status. “It’s easier for one country to make changes than five or ten,” Sankaran said, adding that the markets are watching the pace of the renminbi’s internationalization.
“It takes a very long time to build the infrastructure,” Sankaran said. “It’s happening. But it’s happening slowly.”
Notes: *According to a recent article in the SCMP, Liu Shijin, a former vice-minister at the Development Research Centre of the State Council and a former member of the People’s Bank of China’s Monetary Policy Committee, “urged the country to significantly narrow this gap during the 15th five-year planning period (2026-2030). He noted that, while maintaining export competitiveness, China should also increase the share of imports settled in yuan.” “About 13.7 trillion yuan (US$1.97 trillion) of China’s cross-border goods trade was settled in yuan last year, a year-on-year increase of 10.7 per cent, accounting for about 30 per cent of the country’s total foreign trade, according to the PBOC. The central bank did not provide breakdowns, but settlement is widely believed to concentrate on exports.”
