A Nasdaq analyst has issued a warning concerning the BRICS alliance, saying the bloc could destabilize the US dollar into a crisis. The BRICS bloc has threatened the greenback’s place as the top fiat in the world for a few years, and the threat continues to grow. As the US dollar has suffered from a bearish period in the last few years due to inflation and other concerns, more attention has been drawn to the bloc.
According to Melissa Pistilli of Nasdaq and the Investing News Network, the new BRICS currency can clear a path for BRICS to dethrone the US dollar. BRICS currency would allow these nations to assert their economic independence while competing with the existing international financial system. Additionally, the use of the greenback has already deteriorated globally over the last few years. Until recently, nearly 100 percent of oil trading was conducted in US dollars. However, in 2023 one-fifth of oil trades were reportedly made using non-US dollar currencies.
BRICS to Continue US Dollar Challenge with De-Dollarization
The BRICS challenge of the US Dollar is nothing new. The collective has been threatening the greenback’s position for the last several years. Although it has been a steady process, its efforts have had some kind of impact. Now, more countries are looking to ditch the USD and support the BRICS initiative. The growth of trades excluding the US dollar is especially alarming, and BRICS members are even trading with non-members in other currencies, such as the Chinese Yuan. If a BRICS currency is announced at the bloc’s upcoming summit,
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Furthermore, China is one of the most active BRICS nations in the de-dollarization efforts. Thus, according to Pistilli, should the BRICS nations establish a new reserve currency, it would significantly impact the US dollar. The de-dollarization efforts may continually lead to a decline in demand for the US currency.
Besides the de-dollarization agenda from BRICS, the US dollar will also have to battle the upcoming CBDC currencies. 134 countries around the globe are in the pilot phase of testing their respective digital currencies. The Atlantic Council reported that out of the 134 countries, 66 nations are already in the advanced phase of testing. CBDC currencies could be a reality in 2027 and challenge the prospects of the US dollar.