The BRICS alliance kick-started the de-dollarization agenda in 2022 after the US pressed sanctions on Russia for invading Ukraine. Russia and China started the de-dollarization agenda by showing developing nations that their economies are under threat from the US. They convinced other countries that the US could sanction their economies at any time. This led to fears that their economies were not safe and the need to safeguard their currencies from the US dollar.
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The US Treasury Secretary Janet Yellen also confirmed that sanctions led BRICS to kick-start the de-dollarization agenda. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade. In this article, we will highlight the three important steps that BRICS took to start the de-dollarization narrative.
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BRICS: 3 Ways De-Dollarization Initiative is Progressing
BRICS is advancing in its de-dollarization agenda by putting local currencies ahead of the US dollar for global trade. Several nations are looking to strengthen their native economies and boost their local currencies in the international markets. According to them, the BRICS bloc is the only glimmer of hope that can make them achieve the results of de-dollarization. The three ways that BRICS kick-started the de-dollarization initiative are below.
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- Settling Payments in Local Currencies
The BRICS members are re-working bilateral trade deals and settling cross-border transactions in local currencies. They are showing other countries how de-dollarization needs to be done.
- Convincing Other Countries To Ditch The US Dollar
Russia and China are on a world tour on de-dollarization convincing other developing countries to start settling trade in local currencies. They are educating developing nations on the need to strengthen their native economies and boost their currencies on the global stage.
- Integrate New payment Systems Without the US Dollar
BRICS member countries are also integrating new payment mechanisms for the smooth functioning of local currency transactions. The new payment systems will not include the US dollar for transactions, thus forging ahead in the de-dollarization agenda.