The BRICS alliance is looking to dethrone the US dollar by launching a new currency in the international markets. The development threatens the US dollar supremacy as BRICS aims to dominate the global financial sector with a new currency. As the currency wars heat up, BRICS is doing everything possible to take the driver’s seat putting the US dollar behind.
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Nonetheless, BRICS can challenge the USD even without launching a new currency, explains Joe Sullivan, a senior advisor at the Lindsey Group. The statement comes at a time when members are settling trade in local currencies and not the USD.
BRICS Can Target US Dollar Even Without Releasing New Currency, Explains Sullivan
Joe Sullivan explained that BRICS don’t need to wait until a new currency is launched to challenge the USD. According to the analyst, if BRICS creates a rule to settle payments in local currencies among member nations, the USD’s dominance will automatically come down and affect the American economy at large.
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“BRICS do not even necessarily need to have a shared trade currency to chip away at King Dollar’s domain. If BRICS demanded that you pay each member in its own national currency in order to trade with any of them, the dollar’s role in the world economy would go down,” he wrote on the Foreign Policy website.
Sullivan added that a variety of local currencies could gain prominence if the USD is brought down. Read here to know how many sectors in the US will be affected if BRICS completely stops using the dollar.
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In conclusion, the coming years will decide how BRICS plays its cards to keep the US dollar from rising. The global order could tilt from the West to the East if developing countries decide to trade in local currencies.