The inclusion of oil-producing countries like Saudi Arabia and the UAE into the BRICS alliance could lead to 90% of the world's oil trade being settled in local currencies instead of the USD, potentially triggering a shift away from the U.S. dollar and impacting the global finance system.
The Brics economic group, consisting of Brazil, Russia, India, China, and South Africa, is discussing the possibility of expanding its membership and promoting the use of local currencies for trade settlement, with aims to challenge the dominance of the US dollar, but analysts believe that the greenback is unlikely to lose its status as the international reserve currency.
The BRICS summit, which aims to establish a new world monetary order and give voice to underrepresented nations, is criticized for being a nebulous concept without concrete achievements and is primarily centered around China.
Russia has called on the BRICS alliance to abandon the US dollar for trade settlements and instead embrace local currencies, in a continuation of the bloc's de-dollarization efforts.
Central banks are exploring the issuance of digital currencies to promote financial inclusion and provide easier access to money for unbanked populations, with the potential to reduce dependence on cash, increase local currency adoption, and impact the role of international currencies such as the US dollar.
Brazil's President proposed the creation of a common currency for BRICS nations to reduce their vulnerability to dollar exchange rate fluctuations, although officials and economists have acknowledged the challenges of such a project.
South Africa's finance minister says that the BRICS grouping will not replace international payment systems like SWIFT but will explore creating one that strengthens trade in local currencies.
The BRICS summit is aiming to reduce reliance on the U.S. Dollar, as the coalition confirms new members including UAE, Egypt, Ethiopia, Saudi Arabia, and Argentina, and discusses the possibility of a new payment system and currency backed by gold.
The BRICS, a bloc of emerging market nations, has expanded its membership to include Saudi Arabia, Iran, Egypt, Argentina, Ethiopia, and the United Arab Emirates (UAE), with the goal of building a fair, just, inclusive, and prosperous world; however, experts question whether BRICS can effectively compete with the West given their differing priorities, and the ambition of creating a common BRICS currency to rival the dollar is unlikely to materialize due to competing interests and priorities among member states.
The BRICS alliance, now including six of the world's largest oil producers, aims to utilize its mass oil production to promote local currencies and reduce reliance on the US dollar in international trade.
BRICS is considering making local currencies the only accepted form of payment for oil and gas settlements, which could potentially shift global power from the West to the East.
The BRICS nations are divided on the issue of de-dollarization, as statements from the bloc's leaders indicated, despite discussions about the creation of a common currency to rival the US dollar.
The dollar is not likely to lose its status as the global reserve currency despite the expansion of the BRICS group of nations and their aim to find an alternative, as technology and not commodity-based currencies are expected to be the driving force in the future.
The BRICS expansion and their de-dollarization efforts have been met with a relatively calm response from the US, Germany, and the European Union, emphasizing the importance of countries choosing partnerships based on their national interests.
The BRICS alliance is considering the creation of a 'single unit account' as an alternative currency to the US dollar, in order to settle cross-border transactions without depending on a single currency or local currencies.
Developing countries, including members of the BRICS and ASEAN alliances, are actively seeking to reduce their dependency on the US dollar and promote their local currencies for global trade, with a total of 21 countries officially agreeing to ditch the US dollar in 2023.
Creating a BRICS currency backed by gold is considered nonsensical by a former Bank of America strategist, as it would essentially be another gold derivative and would weaken individual currencies within the group.
The BRICS expansion, which includes countries like Saudi Arabia, the UAE, and Iran, has raised concerns in the U.S. and EU as it poses a threat to Western-dominated financial markets, while China's influence grows and the alliance aims for de-dollarization in global trade.
Brazil President Luiz Inacio Lula da Silva's proposal for a shared currency among the BRICS nations has been met with skepticism due to logistical and political challenges, with differing levels of enthusiasm among the other leaders and the dominant position of the US dollar in global trade.
The BRICS bloc, including countries like India, China, and Russia, is slowly reducing its dependency on the US dollar and using their local currencies for trade, which could potentially weaken the US dollar's position as the dominant global currency.
