Twenty-five years after Goldman Sachs economist Jim O’Neill coined the term to describe the world’s most promising emerging economies, BRICS has become something O’Neill never designed it to be: a geopolitical organisation. It now counts Egypt, Ethiopia, Iran, the UAE, Indonesia, and Saudi Arabia among its members. It represents more than 40% of global GDP and roughly half the world’s population. Yet its most recent foreign ministers’ meeting ended without a joint statement, unable to bridge disagreements over the Iran war. The bloc’s expansion has outpaced its coherence.
What BRICS Has Become
The original five — Brazil, Russia, India, China, and South Africa — shared an economic logic. They were large, fast-growing, and underrepresented in global institutions designed in the 1940s for a different distribution of global power. The bloc’s expansion into what is now commonly called BRICS+ adds geopolitical weight but also geopolitical complexity.
By mid-2026, local currency transactions among BRICS members have risen to around 65% of intra-bloc settlements, with the US dollar and euro together accounting for less than 30% of transaction volume among members. China’s Cross-Border Interbank Payment System (CIPS) has matured as a SWIFT alternative. India has established rupee settlement arrangements with more than 20 countries. The upcoming BRICS Pay platform aims to interconnect national payment systems and integrate central bank digital currencies, enabling direct cross-border settlement outside dollar-denominated infrastructure.
As explored in The Yen Hit a 40-Year Low. Every Country Read It Differently, currency and financial architecture questions have become central to geopolitical competition. BRICS is now a significant actor in that competition — not because it threatens to replace the dollar immediately, but because it is constructing alternatives that reduce the cost of avoiding it.
De-Dollarisation: Real but Gradual
The dollar still dominates. Around 90% of global transactions still involve it. The IMF estimates it accounts for roughly 60% of central bank foreign exchange reserves. The euro holds around 20%. The Chinese yuan sits below 3%. O’Neill himself, who created the BRICS concept, told Reuters in July 2026 that dollar alternatives are “no longer a fantasy” — while acknowledging the structural barriers remain enormous.
The honest assessment is that de-dollarisation is happening, but slowly and unevenly. Sanctions on Russia accelerated it for some countries; Trump’s tariff escalations in 2025 accelerated it further. Countries that once had no particular interest in reducing dollar dependence now do so for defensive reasons — shielding themselves from potential use of the dollar as a coercive instrument. That motivation has given the BRICS financial agenda a seriousness it previously lacked.
The New Development Bank, now with 11 member states and $40 billion in approved projects across infrastructure and sustainable development, represents the institutional form this takes. Unlike the World Bank and IMF, the NDB operates without conditionalities, with equal voting rights for founding members, and with no veto power for any single country. It is not yet large enough to challenge Bretton Woods institutions. It is large enough to provide an alternative.
Where the Cracks Show
The May 2026 BRICS foreign ministers’ meeting produced a chair’s statement from India rather than a joint communiqué — a significant distinction. The failure to agree reflected genuine divergence. India, the UAE, and Iran hold incompatible positions on the Middle East conflict. India simultaneously chairs BRICS and hosts the Quad with the United States, Japan, and Australia. That dual positioning captures the fundamental tension inside BRICS+: most of its members are not anti-Western. They are non-Western, which is different.
French Foreign Minister Jean-Noël Barrot crystallised the European reading of this distinction in a meeting with India’s External Affairs Minister this year. France chairs the G7 while India chairs BRICS. Both, Barrot suggested, could find common ground on multilateralism. President Macron went further: “BRICS countries must not become anti-G7 and G7 must not become anti-BRICS.” That formulation — which India’s government broadly shares — reflects the reality that most BRICS+ members have no interest in dismantling the global order. They want to reshape it to reflect their greater weight within it.
Europe’s Strategic Calculation
From a European perspective, BRICS presents a challenge that is neither as simple as a rival bloc nor as manageable as a collection of bilateral relationships. The EU’s approach has been cautious. It maintains deep trade and investment relationships with China, Brazil, India, and South Africa simultaneously. It cannot treat BRICS as a hostile organisation without damaging those relationships. It cannot ignore BRICS without ceding influence in institutions where BRICS members are increasingly present.
The most consequential European question about BRICS isn’t about the dollar. It’s about global governance. BRICS has positioned itself explicitly on AI governance, climate policy, and reform of international institutions including the UN Security Council. On AI, the 17th BRICS Summit concluded that governance should not be determined by a small number of countries alone — a direct challenge to the framework the EU and US are building together. On climate, BRICS+ includes some of the world’s largest emitters and some of its most climate-vulnerable economies, making any global framework that excludes their active participation structurally incomplete.
This connects to the pattern explored in The End of Peak Globalisation: the world is not fracturing into opposing blocs. It is becoming multipolar in a more complex sense — multiple overlapping networks, each organised around different logics, with different memberships and different rules. BRICS is one such network, and it is becoming too significant to treat as an abstraction.
The View from Brussels
The EU has no formal relationship with BRICS as an institution. It maintains bilateral relationships with individual members. That approach made sense when BRICS was primarily an economic category. It makes less sense when BRICS is actively building alternative payment systems, development banks, and governance frameworks that the EU will eventually have to engage with on their own terms.
O’Neill’s comment that the West “cannot ignore BRICS for another 25 years” understates the timeline. The question is not whether Europe will have to engage with the bloc’s growing institutional presence. It is whether it does so reactively, as BRICS institutions become established facts, or proactively, while there is still space to shape the rules they operate by.
Key Sources
- Reuters – BRICS Alternatives to Dollar No Longer a “Fantasy,” Economist O’Neill Says
- Reuters – BRICS Talks End Without Joint Statement, Exposing Divisions Over War in Iran
- The Times – West Cannot Ignore BRICS for Another 25 Years
- Wikipedia – 17th BRICS Summit
- European Institute for Asian Studies – From BRICS to BRICS+: India, the EU and Shifting Global Power Dynamics
- Carnegie Endowment – BRICS Expansion and the Future of World Order
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