BRICS, a group of five major emerging nations - Brazil, Russia, India, China, and South Africa have been looking for ways to decrease their dependence on the U.S. dollar and have advocated using their national currencies in mutual trade. The member nations have proposed creating a cryptocurrency for settling payment transactions between the countries.
Kirill Dmitriev, the head of the Russian Direct Investment Fund (RDIF), told "increasing non-market risks of the global payment infrastructure" was behind the plan to integrate the group's national payment systems.
“An efficient BRICS payment system can encourage payments in national currencies and ensure sustainable payments and investments among our countries, which make up over 20% of the global inflow of foreign direct investment.” - said Dmitriev, a member of the BRICS Business Council.
The five major and emerging economies would trade in their national currencies. The international payment system would allow skirting economic sanctions imposed by the US and other western countries.
This is not the first instance when countries have opted against the use of the US currency in international trade. Since the US dollar constitutes 61% of the forex reserves throughout the world, it makes the US dollar a de facto global currency, though it doesn't officially hold the title.
Due to the dollar's hegemony over all the other currencies, it empowers the US to impose economic sanctions on nations, which it perceives as hostile. Presently, varying degrees of sanctions are functional on a number of countries such as Russia, Iran, Venezuela, Cuba, Sudan, Zimbabwe, Myanmar, the Democratic Republic of Congo, and North Korea.