Amid the greater de-dollarization plan for the BRICS bloc, and overall digitization of finance, 130 nations are all moving toward a Central Bank Digital Currency (CBDC) which could leave the US dollar at risk. Subseuqnlety, the BRICS currency, which is likely to be announced in the coming year, could only add to the international pressure facing the greenback.
Reports from the summer confirmed the plethora of nations that are in “advanced phases” of CBDC development. Moreover, a survey from the Official Monetary and Financial Institutions Forum (OMFIF) states that 41% of Central Banks expect a CBDC to be fully operational by the year 2028. So, what does that mean for the United States dollar?
Also Read: BRICS: UAE & China to Increase Trade in Local Currencies
More Than 130 Countries Working on CBDC Development Amid BRICS Currency Creation
Throughout 2023, the showdown between the BRICS alliance and the US dollar dominated headlines. Indeed, the former had set off massive geopolitical implications with its various de-dollarization plans. However, the projects of the BRICS alliance may not be all that the Western-based currency has to fear.
Specifically, research shows that amid BRICS action, 130 nations are moving toward a CBDC, putting the US dollar at risk. Moreover, this development arrives alongside the continued work on a BRICS currency project. Many have pondered whether or not that could also be a digital asset used unilaterally.
Also Read: BRICS: Major US Bank Predicts Future of US Dollar
Additionally, a recent OMFIF survey shows that 41% of Central Banks are expecting a fully operation CBDC in four years. That could fast-track the overall prevalence of these digital currencies on a global scale. Therefore, countries around the world could opt for greater local currency use, moving away from the US dollar to an even greater degree.
To date, more than 11 nations have already launched their own CBDC pilots. Moreover, the digital yuan saw tremendous success earlier this year. As the popularity of similar currency options grows, the dollar’s reign within international settlements could certainly be threatened.
There is no denying that 2024 presents a very important year for the US dollar. The global south does not seem prepared to halt its de-dollarization plans anytime soon. Moreover, as US allies such as Saudi Arabia and the UAE adopt these endeavors, the currency could face irreparable harm.