24 Jun Lula’s Currency Dilemma: BRICS Unity Eludes Brazil and Latin America
By,
Jesús Romero. Co-Founder & Senior Fellow, MSI²
As President Luiz Inácio Lula da Silva prepares to host the 2025 BRICS Summit in Rio de Janeiro, his long-standing ambition to realign global power through South–South solidarity is facing new geopolitical headwinds.
Positioning Brazil as a champion of a multipolar world, Lula has pushed for reduced reliance on the U.S. dollar through local-currency trade and alternative payment systems (Reuters, 2024a). However, as the summit draws near, symbolism is colliding with strategic inertia.
A Vision Outpaced by Reality
India has publicly downplayed the prospects of a common BRICS currency, stating discussions remain at a “very early stage” (Times of India, 2025). China is focused on internationalizing the yuan rather than building a shared monetary system. Russia, under the weight of Western sanctions and wartime inflation, lacks the economic bandwidth to lead. South Africa remains economically constrained.
Lula, once the loudest advocate for a unified BRICS financial identity, now faces the limits of Brazil’s influence.
“We cannot remain trapped in the past, chained to financial systems that were not designed for us,” Lula said in a recent speech at the National Confederation of Industry.
Increasingly, he appears less like a founder of a new financial order and more like a mediator in a bloc dominated by competing national interests.
A Frustrated Host and a Region in the Passenger Seat
While Brazil holds a seat at the BRICS table, it does not control the agenda. For much of Latin America, the bloc has delivered more rhetoric than results. Despite repeated declarations and the creation of the New Development Bank (NDB), tangible benefits for the region remain limited (Reuters, 2025c; New Development Bank, 2025).
Colombia’s recent accession to the NDB has so far brought little in terms of new infrastructure or financing (AP News, 2025). Argentina’s 2024 entry to BRICS during its economic crisis has yet to yield meaningful fiscal relief. Meanwhile, countries like Chile, Peru, and Uruguay, which maintain closer ties to Western institutions, remain outside the initiative.
“BRICS offers symbolic solidarity,” said Paulo Velasco, professor of international relations in Rio. “But structurally, it reinforces the same hierarchies Latin America has long sought to escape.”
The Development Bank’s Disappointment
Launched in 2015 to finance infrastructure across the Global South, the NDB’s impact in Latin America has been modest at best. According to its own data, only 14.8 percent of total approved funding has gone to Latin American countries, primarily to Brazil and mostly for previously approved projects (New Development Bank, 2025). In contrast, the largest recipients remain China and India.
This funding imbalance points to a deeper structural issue. BRICS is a consensus-driven forum, but its internal decision-making and capital distribution strongly favor its largest Asian members. Without governance reforms, the bloc risks replicating the same inequities it was created to resist.
A Platform for Trade or a Tool of Leverage?
BRICS Pay, a digital settlement platform, has been presented as a breakthrough in de-dollarization efforts. However, experts caution that it may serve China’s geopolitical strategy more than regional empowerment. Yuan-denominated trade is expanding while currencies like the Brazilian real and Argentine peso remain peripheral and volatile (Coquidé et al., 2023).
“This isn’t de-dollarization. It’s potential re-yuanization,” noted one Latin American finance official.
Trade patterns also remain unchanged. Latin America continues to export raw materials while importing high-value manufactured goods, especially from China. The structural dependency is economic, but its consequences are strategic.
Lula’s Multipolar Gamble and the Path Forward
With limited progress toward reform from within BRICS, Lula has leaned into diplomatic messaging. He continues to promote financial sovereignty, regional resilience, and a BRICS that reflects the aspirations of the Global South. These themes resonate, but without tangible institutional change, their impact remains symbolic.
If Brazil intends to strengthen its role in shaping international norms, it may need to look elsewhere. Strengthening regional initiatives through CELAC and MERCOSUR could offer more targeted financial cooperation. These forums, though smaller in scale, may provide more aligned interests and greater space for leadership.
“If Brazil and its allies want real influence,” said a former finance minister, “they must demand rules-based equity, not just ceremonial inclusion.”
Conclusion: Present at the Table, Absent from the Blueprint
The Rio summit will likely showcase strong rhetoric about solidarity, development, and sovereignty. But unless structural reforms are pursued, BRICS will continue to function as a geopolitical stage dominated by a few rather than as a platform for collective advancement.
Latin America may have a seat at the table. But it still lacks a voice in designing the blueprint.
References
AP News. (2025, June 17). Colombia seeks to join China-based development bank as Latin America drifts away from Washington. https://apnews.com/article/ae2f3b0da5c330c0cf051351857d1771
Coquidé, C., Lages, J., & Shepelyansky, D. L. (2023). Prospects of BRICS currency dominance in international trade [Preprint]. arXiv. https://doi.org/10.48550/arXiv.2305.00585
New Development Bank. (2025). Projects approved and country breakdowns. Retrieved June 22, 2025, from https://www.ndb.int/projects
Reuters. (2024a, October 23). Brazil’s Lula urges BRICS to create alternative payment methods. https://www.reuters.com/technology/brazils-lula-urges-brics-create-alternative-payment-methods-2024-10-23/
Reuters. (2024b, December 17). Explainer: What is a BRICS currency and is the U.S. dollar in trouble? https://www.reuters.com/markets/currencies/what-is-brics-currency-is-us-dollar-trouble-2024-12-17/
Reuters. (2025a, February 13). Brazil nixes BRICS currency, eyes less reliance on ‘mighty’ dollar. https://www.reuters.com/markets/currencies/brazil-nixes-brics-currency-eyes-less-reliance-mighty-dollar-2025-02-13/
Reuters. (2025b, May 19). No BRICS asset pile big enough to rival dollar, Brazil central bank director says. https://www.reuters.com/world/americas/no-brics-asset-pile-big-enough-rival-dollar-brazil-central-bank-director-says-2025-05-19/
Reuters. (2025c, June 19). Colombia announces accession to BRICS’ New Development Bank. https://www.reuters.com/latam/negocio/LJ2A4UMP5FLBJIL4KT57R6ILTI-2025-06-19/
Times of India. (2025, June 22). BRICS summit in Rio: Bloc may push trade in local currencies, countries differ on common currency; India says discussions still at ‘early stage’. https://timesofindia.indiatimes.com/business/international-business/brics-summit-in-rio-bloc-may-push-trade-in-local-currencies-countries-differ-on-common-currency-india-says-discussions-still-at-early-stage/articleshow/121994756.cms
The opinions expressed in this article are those of the author and do not necessarily reflect the views of the Miami Strategic Intelligence Institute (MSI²).