Monetary leadership in the BRICS countries: Which currency can exceed the footprint of the US dollar, gold or Bitcoin?

Abstract

This study investigates the dynamic interplay between national currencies of the core BRICS economies and the three strongest monetary assets (US dollar, gold, Bitcoin) in the existing global financial outlook. Using data spanning the inflationary Russia-Ukraine conflict (24 February 2022 to 5 June 2025) and the innovative Quantile-VAR methodology in bear, normal and bull market conditions as expressed by quantiles insights are offered about the potential of transformation of the monetary status quo. Findings reveal that extreme market conditions strengthen the leading potential of Bitcoin and gold in early and later war phases, respectively. This abides by the pseudo-wealth and consumption fluctuations theory of Guzman and Stiglitz (2021) as higher risk-taking appears in turbulent periods for preserving and promoting growth. Shielding from inflation could also work this way. The Brazilian, Chinese and South African currencies gain prominence while the Russian currency acts as a net absorber of shocks. So the US dollar could be partly crowded out. Alterations in monetary asset allocation for investors could serve for better adapting to contemporary financial needs.