Russia has been spearheading the push for the creation of a joint currency, and Brazil has also thrown its support behind the idea. China, too, is in favor of challenging what its ministry of foreign affairs calls U.S.
South Africa’s Foreign Minister Naledi Pandor has said a move away from the dollar could empower other countries, but also noted the project is challenging: "It’s a matter we must discuss and discuss properly. I don’t think we should always assume the idea will work, because economics is very difficult, and you have to have regard to all countries."
Isaah Mhlanga, chief economist for Rand Merchant Bank, a South African investment bank, told VOA he thought the idea that a BRICS currency could upend the dollar’s dominance "any time soon" was "just not founded by any economic fundamentals that we know of."
The U.S. dollar has been the world’s dominant currency since the end of World War II. Eighty percent of international transactions are conducted in U.S. dollars and nearly two-thirds of all currency reserves in central banks are in dollars. U.S. capital markets are also the most liquid in the world.
"South Africa really can’t play much of a role, it’s a very small open economy with very little reserves, which gets influenced by global factors. China might have a possibility but the willingness of the Chinese authorities to let the Chinese currency float freely and lose control is close to none," he said.
Mhlanga also noted that given the different economic and political systems of the members of BRICS "it's quite difficult to have a common currency." He said although there has long been talk of a single currency for Africa, an actual economic framework for it is "still nowhere to be seen, it’s almost impossible."
Most likely, he said, would be for individual member states to conduct more bilateral trade using their own currencies, as has already happened with Russia and India’s trade in oil.
South African Reserve Bank Governor Lesetja Kganyago also expressed some skepticism this week, saying that if a single form of legal tender were created by BRICS it would spur debate about the creation of a central bank and where that would be located.
"I don’t know how we would talk of a currency issued by a bloc of countries that are in different geographical locations because currencies are national in nature," he said. "For the euro area to arrive at that, they had to establish a treaty where the other countries had to all surrender their currencies."
A game-changer or a non-starter?
However, some economists think a new currency could be a game-changer. BRICS accounts for some 40 percent of the world’s population, and an estimated one-quarter to one-third of global GDP.
A number of other countries, including Saudi Arabia and Iran, have also expressed interest in joining BRICS.
Writing in Foreign Policy magazine recently, former White House economist Joseph W. Sullivan said that while "many practical questions remain unanswered, such a currency really could dislodge the U.S. dollar as the reserve currency of BRICS members.”
Mikatekiso Kubayi, a BRICS specialist at the Pretoria-based research organization the Institute for Global Dialogue, told VOA that easier and more equitable trade was the main reason BRICS members wanted a common currency.
"A lot of the countries that BRICS trades with… particularly in the global South, they all share one common challenge," he said. "The expense, the cost of actually doing trade, the cost associated with fluctuating exchange rates, the dominance of some currencies over others and that sort of thing, access to cheap finance, affordable finance for their infrastructure."
But Aly-Khan Satchu, a political economist based in Nairobi, said he thinks the main reason long-held ideas of a BRICS currency have gained momentum is primarily due to Western sanctions on Russia for the war in Ukraine.
"The freezing of their reserves, $300 billion, by the Americans and a similar scenario unfolding in Europe, forced the Russians to look for a different payment solution outside the U.S. system," he said.
"I think it’s difficult to underestimate the level of shock that various countries have experienced when Russia’s reserves were frozen," he said.
"China saw that and thought look, if they can do it to Russia they can do it to us," he added, noting Beijing—given its current strained relations with Washington – had got on board with the idea very quickly.
The Chinese Ministry of Foreign Affairs recently released a long policy paper entitled "U.S. Hegemony and its Perils," which stated: "The hegemony of U.S. dollar is the main source of instability and uncertainty in the world economy."
The paper also noted Washington’s use of sanctions, saying "America's economic and financial hegemony has become a geopolitical weapon."
Asked how viable a BRICS currency would be, Satchu said there were some impediments.
"The main hurdles and pitfalls are that there are plenty of interested parties. Constructing a currency is not an easy task, there’s a question of how its composition will be constructed. There’s a lot of talk about having a commodity-based currency and therefore there will be complexities around the weighting of the various commodities," he said, referring to the proposition the currency be tied to oil or gold.
Likewise, he said, Beijing has no intention of making China’s Yuan fully convertible now because they’d lose a lot of control.
"The hard market reality is that the dollar remains supreme, 80 percent of trade is conducted in the dollar… the most liquid market in the world. This is really about chipping away at the foundations of the dollar rather than a decapitation," he said.
The Bank of America said last week in a note that reports of U.S. dollar replacement are "greatly exaggerated," echoing Mark Twain’s famous quote "reports of my death are greatly exaggerated."