The BRICS Alliance has been making headlines globally as of late. As the United States and its native US Dollar continue to suffer from inflation, nations worldwide that rely on the currency are looking for alternatives. BRICS is looking to create that alternative soon with its BRICS currency.
The BRICS currency is not solidified yet, however, the idea is enough to threaten the West, specifically the US. More nations each week are seemingly ditching the US Dollar for an alternative, whether it be the Chinese Yuan, as Argentina recently did, or a local currency. This further promotes the BRICS mission of de-dollarization.
While in 20 years BRICS hasn’t made too many moves yet, the threat of a new currency is doing enough to shake the relations between the US and other nations that use the US Dollar in trade. New regulations in the US and inflation, as mentioned previously, aren’t doing the US any more good. However, if a global BRICS Economy is established, the West economy may be in danger.
The US Dollar is in a precarious position. While it is currently somewhat stable, inflation and a potential US Government default may change that. BRICS is set to meet in August, and a hot topic will be the BRICS currency. The BRICS nations individually are huge economic powerhouses, and working together to influence smaller countries, the alliance can potentially gang up on the US Dollar with its own currency and devalue it even more.
BRICS Potential to Fail?
On the other hand, it’s important to note that this is all mere speculation. The US Dollar has been a powerhouse in the global economy for decades and has never seen a true threat. While BRICS are powerhouses individually, they still sit low below the US economy. Since its high point in the early 2010s, Brazil’s GDP has declined from $2.6 trillion to $1.6 trillion. The Brazilian economy is resource-based, meaning that without decent commodity prices on resources, the economy fails to grow or sustain itself.
Russia remains unequal in terms of income among its population. While some live lavishly in modern cities, the rural population remains far behind in terms of income.
India and China are still ironing out their diplomatic issues, and have often been at odds. Despite being in BRICS, the two may still differ in terms of approach to BRICS currency.
Lastly, South Africa is of course the youngest and smallest nation out of BRICS. Economic Woes, and corruption, among other issues internally could slow its involvement in a BRICS currency. It is fragile in an otherwise powerhouse alliance.