On the final day of the annual BRICS summit in Johannesburg on Thursday, leaders of the group announced Saudi Arabia, Iran, Egypt, Argentina, Ethiopia, and the United Arab Emirates (UAE) will join their ranks starting Jan. 1. 

“BRICS has embarked on a new chapter in its effort to build a world that is fair, a world that is just, a world that is also inclusive and prosperous,” South African President Cyril Ramaphosa said of the move, noting that this is “the first phase of this expansion process and other phases will follow.”

BRICS nations have long sought to bolster their group’s geopolitical power in order to counter the West on economic and political issues, and the addition of some of the world’s largest energy exporters—Saudi Arabia, Iran, and the UAE—will certainly help with that goal. BRICS also has a waiting list of dozens of nations that are ready and willing to join the group amid dissatisfaction with the current, often U.S.-led, world order. 

But Gregory Daco, chief economist at Ernst & Young’s global strategy consulting arm EY-Parthenon, questions whether BRICS can really compete with the West on the global stage in the near term, given the differing priorities of its constituent nations.

“It’s a nice acronym, but it’s not really something that would rival the G7 in the next 15 years, 20 years; that’s more of a long-term consideration,” he told Fortune after the BRICS summit Thursday, referencing the rival bloc of Western nations that includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.

And when it comes to BRICS’s ambitions of de-dollarization, or the goal of becoming less reliant on the dollar, Daco is even more incredulous.

“The problem is the current lack of trust, lack of alignment, and lack of priorities when it comes to each country’s strategic plan,” he said. “What this means is that we currently have an environment in which these large emerging markets cannot represent a viable alternative to the dollar.”

Don’t expect a common currency

The idea of creating a BRICS common currency to rival the dollar has long been on the agenda of the emerging-market nations in the bloc. But there has been increased interest in the proposal ever since Brazilian President Luiz Inácio Lula da Silva in April questioned the greenback’s role in global trade.

“Who decided the dollar would be the [world’s] currency?” Lula da Silva asked at a ceremony in Shanghai. “Why can’t a bank like the BRICS bank have a currency to finance trade between Brazil and China, between Brazil and other BRICS countries?”

Leslie Maasdorp, the vice president and CFO of the New Development Bank, a financial institution created by BRICS, followed up those comments in July by noting that although there are no current plans to create a common currency, it remains a “medium- to long-term ambition.”

But South Africa’s finance minister, Enoch Godongwana, pushed back against the idea at the BRICS summit this week. “No one has tabled the issue of a BRICS currency, not even in informal meetings,” he said in an interview, per Bloomberg. “Setting up a common currency presupposes setting up a central bank, and that presupposes losing independence on monetary policies, and I don’t think any country is ready for that.”

Jim O’Neill, the veteran economist who coined the term BRIC (the group did not originally include South Africa) when he worked at Goldman Sachs in 2001, also labeled the common currency proposal a “ridiculous idea” earlier this month. He cited the tumultuous relationship between the burgeoning superpowers India and China, arguing it would make any agreement on the matter impossible. 

It’s a point that Neil Shearing, group chief economist at Capital Economics, backed up in a Thursday note—even after the latest BRICS summit where China and India agreed to “expeditious disengagement and de-escalation” of their multiyear Himalayan border standoff.

“The fractious relationship between India and China is a key reason why building a strong and cohesive counter-weight to the G7 with a clear identity set of policy priorities will be difficult,” Shearing wrote. 

The veteran economist believes BRICS nations will “continue to pursue common goals” and attempt to expand their membership, but “competing interests and priorities” will prevent the creation of a true dollar replacement.

A renminbi challenger? 

While most experts believe the creation of a common BRICS currency remains unlikely, the bloc’s leadership is undoubtedly attempting to slowly move away from their reliance on the dollar. 

In an article outlining some of the objectives of the BRICS summit released last week, the group promised to “reduce the reliance on the U.S. dollar and promote the use of national currencies in international trade.” And at the event, Russian President Vladimir Putin told attendees through a video feed that “the objective, irreversible process of the de-dollarization of our economic ties is gaining momentum.” 

South Africa’s finance minister Godongwana also admitted Thursday that central bankers are discussing how to “facilitate payments between countries” in local currencies instead of the dollar, adding that the Chinese even “want their renminbi to be recognized as a reserve currency.”

Capital Economics’ Shearing notes that China is looking to use the BRICS bloc to expand the role of the renminbi in international trade. “However, such hopes are likely to collide with economic and political realities. The geopolitical priorities of member states are extremely disparate,” he explained. “While Russia will tend to align with China on most issues, others are more wary of unsettling the U.S. and Europe.”

Despite the recent push to supplant the U.S. dollar, the currency was still involved in nearly 90% of global foreign exchange transactions in 2022, according to the Bank of International Settlements. Some 59% of official foreign exchange reserves were held in dollars in the first quarter of this year as well, according to the International Monetary Fund. That’s down from over 70% in 2000, but well above the figures for the Chinese renminbi, which represented just 2.5% of foreign exchange reserves.

For Shearing, all of this means “the renminbi is unlikely to seriously challenge the dollar on the world stage—and the idea of a BRICS currency is an even bigger fantasy.”