Canada’s Bank Credit Analyst Research (BCA) has pushed back on the narrative that BRICS’ de-dollarization drive will topple the US dollar anytime soon. In a new report, the investment-advisory firm introduces a “Dollar Dominance Indicator” to gauge the greenback’s resilience as BRICS members increasingly settle cross-border trade in local currencies.
What BCA measured
- The indicator evaluates the dollar’s role across five key areas — including global financial markets, payments, trade, foreign exchange reserves and capital/banking markets — to capture where the currency really matters.
- Despite growing BRICS activity in local-currency settlements, the dollar “passes all five tests” in BCA’s framework, the firm says.
Why the dollar remains dominant
- BCA argues the dollar’s position is reinforced by powerful network effects: entrenched systems for payments, clearing, capital markets and reserve management make a rapid move away from a US-centric setup difficult.
- The report stresses that while individual countries can tweak reserve allocations or bilateral trade arrangements, shifting the dominant transaction currency across trade, banking and capital markets requires broad coordination among many users — a high hurdle that slows change.
Implications for BRICS and crypto markets
- For the 11-member BRICS bloc, the trend toward local-currency settlements is real and meaningful at a bilateral level, but BCA concludes it’s unlikely to deliver a swift or comprehensive dethroning of the dollar.
- For crypto markets, the findings cut both ways: continued dollar dominance reduces near-term pressure for digital assets to replace the dollar as a global unit of account, but persistent geopolitical friction and gradual diversification could still create niches where stablecoins and tokenized reserves gain traction.
Bottom line
BCA Research forecasts that the US dollar’s supremacy will persist for the foreseeable future. BRICS’ de-dollarization efforts are shifting parts of the global system, but don’t yet amount to a coordinated, system-wide replacement of the greenback.
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