The BRICS alliance is on a mission to dethrone the U.S. dollar as the global reserve and replace it with a new currency. The soon-to-be-released currency will be jointly decided and created in the next summit in August in South Africa. The bloc of nations is advancing at a rapid pace to demolish the global financial order backed by the U.S. dollar. The USD could be hit on the international stage if BRICS is successful in the formation of a new currency.
But can the BRICS currency dethrone the U.S. dollar and demolish the global monetary system creating a new world order? The answer to that could be no. The dollar could be here to stay and reign supreme for many more years or decades to come.
BRICS: Can it Create a New World Order Sidelining the U.S. Dollar?
This is not the first time that a group of countries have come together to plan the formation of a new currency. Nonetheless, if the idea turns into reality, it’s unlikely it could take on the U.S. dollar on the global stage. The currency needs to compete with the USD, Euro, Pound, and Yen, among other leading currencies.
It takes years to build trust in the markets and the exchequer needs assurance of security with the currency. The yet-to-be-released currency needs to withstand the harsh market conditions and prove its mettle on the international scale.
The BRICS countries are a developing economy and any misstep could wreak havoc on their local economies. This leaves them with no room to take risks and the scope for improvements and experiments reduce drastically. The BRICS bloc needs to handle their respective economic situation and also juggle valuable time to the new currency.
In conclusion, the new BRICS currency is not in a position to demolish the U.S. dollar-based global monetary system. However, it will remain sis-by-side the USD and be one among the other currencies being exchanged and traded in the international markets.