*Global Currency Fantasies: The Geopolitical Impossibility of a BRICS Currency*

© Small Drops – Balananthini Balasubramaniam

Abstract

The creation of supranational currencies is not solely an economic endeavour; it is a geopolitical project shaped by historical precedent, institutional sophistication, and political cohesion. While the European Union spent decades constructing the Euro—a project that remains structurally vulnerable—BRICS aspires to a unified currency despite profound economic heterogeneity and political divergence. This article examines the structural, historical, and theoretical determinants that render such ambitions unrealistic, drawing upon Mackinder’s Heartland Theory, Eurozone experience, and contemporary BRICS dynamics.

1. Mackinder’s Heartland Theory and Europe’s Strategic Trajectory

Halford Mackinder’s Heartland Theory (1904) formulated a foundational geopolitical insight:

“Who controls Eastern Europe controls the Heartland; who controls the Heartland controls the World Island; who controls the World Island controls the world.”^[1]

This principle guided European integration, emphasizing the necessity of continental stability and the prevention of conflict. The Euro emerged as a central instrument of this long-term strategy, combining:

A single internal market

A unified currency

A consolidated geopolitical presence

Despite decades of planning, institutional development, and NATO security guarantees, the Euro remains a fragile construct, offering instructive lessons for any aspirant currency bloc.

2. Structural Fragilities of the Euro

The Eurozone benefits from:

Cultural and political proximity

Supranational governance via the EU

Centralised monetary authority through the European Central Bank (Eichengreen, 2008)

Yet, structural tensions persist. Economic asymmetries between northern and southern states, compounded by the lack of fiscal union, reveal that monetary integration requires political solidarity, institutional trust, and fiscal discipline (De Grauwe, 2012; Helleiner, 2003).

3. BRICS and the Illusion of Monetary Cohesion

BRICS is defined by strategic contradictions, institutional incoherence, and economic heterogeneity (Stuenkel, 2016).

Political disunity: India and China remain adversaries, Russia is under sanctions, and Brazil and South Africa pursue divergent agendas.

Institutional deficits: No centralised monetary authority, no enforceable legal frameworks, and voluntary coordination mechanisms only.

Trust and dominance issues: Any currency would be dominated by China, creating political resistance from other members.

Geopolitical limitations: Russia’s exclusion from key financial systems and the lack of collective security undermines credibility on the global stage.

“BRICS’ monetary ambitions are less a blueprint for a global currency and more a statement of political aspiration, constrained by structural heterogeneity, institutional gaps, and mutual distrust.”

4. The Structural Improbability of a BRICS Currency

The idea of a BRICS currency comparable to the Euro is structurally improbable, for the following reasons:

a. Divergent Economies

BRICS economies are vastly heterogeneous: China’s state-led export economy, India’s service-oriented democratic economy, Russia’s resource dependency under sanctions, and Brazil and South Africa’s volatile emerging markets. Unlike the Eurozone, such disparity precludes coherent monetary policy without severe distortion.

b. Political Disunity

Successful currency unions demand political cohesion and supranational governance. BRICS has no mechanism to resolve conflicts, enforce compliance, or harmonise policies among states with strategic rivalries and differing agendas.

c. Institutional and Legal Gaps

A functional currency union requires centralised banking, enforceable law, and fiscal oversight. BRICS lacks all of these, making stability and credibility impossible.

d. Trust Deficits

China’s economic dominance would inherently control monetary governance, creating resistance from India, Brazil, and South Africa. Russia’s sanction-induced isolation further undermines collective trust.

e. Realistic Alternatives

Incremental measures, such as bilateral trade in national currencies, gradual de-dollarisation, and payment platforms like CIPS or BRICS Pay, are the feasible limit of monetary integration for BRICS.

5. Comparative Analysis: Euro versus BRICS Currency Feasibility

A textual analysis highlights why the Euro represents a functional, though imperfect, achievement, while BRICS remains fundamentally incapable of replicating it:

Political Unity – Eurozone: decades of formal political integration via EU treaties, Council, and Parliament. BRICS: coalition of rival states with no overarching governance framework.

Economic Convergence – Eurozone: broadly similar industrial and financial economies; allows for functional monetary policy. BRICS: heterogeneous economies, ranging from state-led export (China) to service-based (India) and resource-dependent (Russia); monetary policy unification impractical.

Institutional Frameworks – Eurozone: centralised ECB, legal enforcement, fiscal oversight. BRICS: no supranational institution, no enforceable legal infrastructure.

Fiscal Discipline & Legal Enforcement – Eurozone: Stability and Growth Pact provides partial fiscal coordination. BRICS: widely divergent fiscal policies, no binding legal instruments.

Trust & Strategic Dependence – Eurozone: shared commitment to norms and trust. BRICS: trust deficits; India, Brazil, and South Africa resistant to Chinese dominance; Russia isolated.

Geopolitical Backing – Eurozone: NATO and regional security frameworks. BRICS: no cohesive military or strategic alignment.

Conclusion – The Euro represents a fragile but functional convergence of political, economic, and institutional factors. BRICS lacks political cohesion, economic alignment, institutional structure, fiscal discipline, and mutual trust. Any attempt to emulate the Euro is geopolitically and structurally unrealistic.

“Currency is not merely an economic instrument; it is the embodiment of political trust, institutional coherence, and strategic alignment—all of which BRICS presently lacks.”

6. Conclusion: Currency as a Geopolitical Instrument

Currency creation is inseparable from geopolitics. BRICS lacks the institutional depth, political cohesion, and strategic credibility necessary to challenge the US dollar. The dollar endures not solely due to economic size, but because of institutional sophistication, global legitimacy, and geopolitical reach (Mearsheimer, 2001; Nye, 2004). Until a bloc emerges with comparable unity and credibility, BRICS’ currency ambitions remain largely rhetorical.

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