Strategic Dedollarization and BRICS-Led Financial Innovation: Reimagining Global Monetary Sovereignty in a Multipolar World

Abstract

This article examines the strategic trajectory of dedollarization led by BRICS nations and the role of financial innovation in reimagining global monetary sovereignty in a multipolar world. While significant work has documented the rise of alternative currencies and payment systems, the strategic and institutional dimensions of BRICS-led statecraft remain under-explored. Drawing on a robust corpus of qualitative secondary data spanning 2010–2025, this study employs a novel, integrated framework that links strategic state motivations, institutional architecture, and technological enablers. Using comparative financial system mapping and thematic document analysis, we trace how BRICS has operationalized dedollarization via instruments such as local-currency trade, currency swaps, and central bank digital currencies (CBDCs). Our findings suggest that while the US dollar remains as dominant currency globally, BRICS initiatives are producing significant, albeit incremental, shifts in global finance. We identify a dual dynamic of territorial diversification, where intra-bloc trade and lending increasingly utilize non-USD currencies, and functional innovation, where new digital payment platforms and CBDCs enable alternative payment rails. For example, the share of RMB in global payment systems has measurably increased from ~2% in 2019 to a peak of nearly 4.6% in late 2024, and over 90% of Russia-China bilateral trade is now settled in local currencies. This growth, however, has fluctuated, with recent reports indicating the share at ~3.5% in April 2025. The paper contributes a nuanced framework that offers clear foresight into how these BRICS actions may incrementally reshape the international monetary and financial system (IMFS), suggesting a gradual restructuring rather than a sudden rupture of dollar hegemony.