The BRICS alliance has made significant strides over the past two years in its mission to dethrone the US Dollar. The bloc recently confirmed the development of a new currency, and more support around it is being built. The nine-member alliance is expected to give updates on the new currency and expansion at its October Summit.
BRICS aims to launch a new currency that will be backed by gold as a counter to the US dollar. A common currency will usher the alliance into a new financial era and become a cornerstone for further developments. Furthermore, with the bloc’s recent gold-buying spree, some financial experts believe that a gold-backed currency could spell the “beginning of the end” for the US Dollar.
In an analysis for intelligence consultancy GIS published Wednesday, Vahan Roth wrote about gold’s recent surge. The precious metal reached a new all-time high of $2,480 per ounce on July 17. Roth said the runup in price is not surprising given the ongoing geopolitical turbulence in the world. “There are two active wars – in Ukraine and the Middle East – and either (or both) could escalate at any moment into a wider international conflict,” he said. “Meanwhile, immensely influential elections are taking place this year: in India, the United Kingdom and the European Union incumbents lost clout, Mexico has a new leader with the same leftist program, and the unpredictable November presidential election in the United States is drawing closer.”
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The World Gold Council reported that BRICS has been the largest buyer of gold since 2022. The bloc is accumulating tons of the precious metal in the reserves. “The grouping has been advocating for a more multipolar world order, and its founding members have aired the idea of launching a gold-backed currency,” Roth said. “No matter how one assesses the realistic prospects of such a currency and its potential real-world impact, and despite the fact that BRICS+ is a rather loose alliance (compared to the European Union, for instance), the fact remains that the group encompasses about 3.5 billion people or 45 percent of the global population, controls 30 percent of the world’s land surface, and its members’ economies account for over 37 percent of global GDP.”
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A BRICS currency backed by gold could be a game-changer in the financial world. The development could also put the US dollar on the back burner. Developing countries could begin to distance themselves away from the US dollar and embrace the new currency for cross-border transactions. The development will only strengthen BRICS and other emerging economies leaving the US dollar distantly behind