BRICS, India, And China’s Digital Renminbi: Is De-Dollarisation Finally Becoming A Reality? — Explained | India News

For decades, the US dollar has been more than just a currency, it has been the basis of global trade, finance and power. Washington’s ability to weaponize the dollar, from freezing assets to imposing sanctions to controlling international payment networks, has long strengthened its geopolitical influence.

But this monopoly now faces an unprecedented challenge. US President Donald Trump has repeatedly criticized the BRICS, accusing them of attempting to de-dollarize. India’s trade in Indian rupees with Russia also hurt the dollar. And now China is coming with something big.

China’s Iconic Digital Breakthrough

In October 2025, the People’s Bank of China (PBoC) made a historic announcement: its central bank digital currency – Digital Renminbi (e-CNY) – will now support cross-border payments with 10 ASEAN countries and six Middle Eastern countries.

This expansion connects approximately 38% of global trade volume directly to China’s blockchain-based financial infrastructure, bypassing the traditional SWIFT system that has served as the backbone of US dollar-denominated payments for decades.

Its effects are profound.

In pilot tests between Hong Kong and Abu Dhabi, PBoC’s “Digital Currency Bridge” (mBridge) enabled cross-border payments in just 7 seconds, compared to SWIFT’s 3-5 day window, reducing transaction fees by up to 98%. Developed in partnership with the UAE, Thailand and Hong Kong, the mBridge system allows central banks to make payments directly through distributed ledger technology, eliminating intermediary banks in New York or London.

For countries wary of US sanctions or payment blocks, this offers something SWIFT cannot: monetary sovereignty.

Beijing’s De-Dollarization Strategy

The expansion of China’s digital currency is not just a financial experiment but part of a long-term geopolitical strategy. Digital RMB combines economic sovereignty, technological innovation and state management.

As of the beginning of 2025, BRICS countries use the yuan for about 24% of intra-bloc trade, while about 90% of total trade is now done in local currencies.

Many ASEAN economies, including Malaysia, Singapore and Thailand, have begun holding RMB in reserves and using the digital yuan for energy or commodity transactions.

Middle Eastern exporters are increasingly open to settling oil and gas trades in RMB, attracted by faster and cheaper payment options.

By creating an alternative financial infrastructure that is faster, cheaper and sanctions-resistant, Beijing is directly challenging the three pillars of US dollar dominance: oil trading, SWIFT brokers and dollar-denominated reserves.

This is more than economic competition; It is the creation of a parallel financial world.

Why Are Emerging Economies Turning to CBDCs?

Today, developing economies face three options in international transactions:

* Stick to SWIFT and the dollar; slow, expensive and politically controlled.

* Be dependent on volatile cryptocurrencies; fast but legally unclear.

* Adopt Central Bank Digital Currencies (CBDCs) — fast, independent and compliant.

CBDCs, unlike cryptocurrency, offer certainty, compliance and legal clarity, making them attractive to governments seeking both financial inclusion and geopolitical autonomy.

China’s digital yuan has proven that CBDC rails can operate at scale, securely, instantaneously and state-backed. This has quietly triggered interest in Africa, Latin America and parts of Asia, where countries see CBDCs as low-risk, high-yield alternatives to the dollar system.

India’s Counter Strategy: A Democratic Digital Currency

While Beijing is advancing rapidly, India is charting its own digital path. The Reserve Bank of India (RBI) is developing digital rupees (eRs), a blockchain-based CBDC designed not to copy China’s system but to offer a more open, inclusive and multipolar model.

India’s approach emphasizes interoperability rather than dominance. Rather than joining the RMB rails, New Delhi aims to build parallel digital corridors that will strengthen its monetary sovereignty while enabling South-South trade integration.

Key features of India’s eR ecosystem include:

* Retail and wholesale versions: for citizens and institutions.

* Offline transaction capability to enable digital payments in rural and unconnected areas – a unique inclusion measure not available in the Chinese model.

* Pilot corridors with UAE, Singapore and Central Asian countries enable near-instant rupee payments independent of SWIFT.

* UPI integration for cross-border payments leverages India’s fintech leadership to democratize global access.

India envisions the digital rupee not only as a national instrument but also as a neutral reserve option under BRICS+, offering smaller economies a trust-based, transparent alternative to both the US dollar and the tightly controlled RMB.

BRICS and the Battle for Financial Multipolarity

The debate on dedollarization within the BRICS has shifted from rhetoric to infrastructure.

Russia conducts more than 30 percent of its trade in yuan after being cut off from SWIFT.

Brazil and South Africa are testing blockchain-based payment systems.

Saudi Arabia, a potential BRICS+ member, has expressed openness to oil trading in currencies other than the dollar, including RMB and INR.

BRICS countries now account for more than 36 percent of global GDP (PPP) and more than 40 percent of global oil production; This is a scale large enough to sustain alternative settlement ecosystems.

Experts say the next phase will include inter-CBDC interoperability—the ability for India’s eCNY, China’s e-CNY, and other BRICS digital currencies to transact seamlessly through standardized, regulated frameworks.

The Future of the Dollar: Still Dominant, But Not Untouchable

The US dollar remains the world’s leading reserve currency, accounting for approximately 58% of global reserves as of mid-2025, but this share has been steadily declining from 71% two decades ago.

De-dollarization is unlikely to happen suddenly; Instead, it will evolve as a multi-currency ecosystem where CBDCs, digital corridors, and local settlement systems gradually erode US dominance.

For Washington, this represents not a sudden collapse but a gradual unraveling of financial hegemony; A world where power no longer flows through one currency, one network or one capital.

In conclusion

The rise of the digital RMB and India’s eRs marks the beginning of a new financial era. China’s model offers speed and state control; India promises inclusiveness and cooperation. Both agree on one simple fact: the undisputed reign of the dollar is coming to an end; not through conflict, but through code, connectivity and currency innovations. But the United States is also unlikely to see this happen quietly. It may attempt to force or manipulate nations into trading only with the dollar and not with other currencies. This situation may also create geopolitical tension, instability and competition.