The BRICS alliance is looking to launch a new currency to take on the U.S. dollar’s global reserve status. The soon-to-be-released BRICS currency will be accepted by developing countries ending reliance on the U.S. dollar. Developing economies in Asia, Africa, Latin America, and Europe could begin to settle global trade with the new BRICS currency. The move could send the dollar into a tailspin and reduce the demand and supply in the international markets.
U.S. Dollar Might Lose Reserve Status to BRICS Currency, Predicts Economist Lord O’Neill
British economist Lord O’Neill warned that the U.S. dollar could soon lose its global reserve status to the yet-to-be-released BRICS currency. According to O’Neill, the Chinese Yuan and Indian Rupee could strengthen and become “much more important currencies for the world.”
The economist stated that the de-dollarization proposed by BRICS could reshape the global financial structure tilting power to the East. Over time, he believes that the BRICS currency could be more powerful than the U.S. dollar for international transactions. O’Neill predicted that the U.S. dollar will at some point lose its global reserve status to the new BRICS currency.
“The idea that the dollar will remain king forever, I think, is probably unlikely. At some point the dollar will lose its dominant status,” the economist predicted.
Moreover, O’Neill also believes that the Chinese Yuan and the Indian Rupee could challenge the U.S. dollar’s prospects first. “What is more feasible, and more likely, is at some point in the future, the RMB [Renminbi], and possibly the rupee are going to be much more important currencies for the world,” he said.
He added, “I do think if China and India could ever strongly agree on things as the two biggest countries in the emerging world, then that would probably hasten the end of the dollar’s dominance.”