Leading global investment bank Morgan Stanley has revealed the biggest challenger to the US dollar as BRICS aims to topple it from the world’s reserve currency status. While the bank acknowledged that US President Donald Trump’s policies are accelerating de-dollarization, the US dollar can survive due to the lack of a real challenger.
However, Morgan Stanley pointed out that one asset remains the biggest challenger to the US dollar, and it has a strong yet robust connection to the BRICS alliance. The investment bank wrote that global finances are transitioning to a “multipolar world,” raising questions about the US dollar’s status. The ongoing trade wars and tariffs are adding to tensions against the US.
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BRICS: Morgan Stanley on the US Dollar’s Biggest Challenger
Amid the growing BRICS de-dollarization efforts, Morgan Stanley wrote that gold is the “biggest challenger” to the US dollar. “On net, we think these factors are neutral to slightly accelerating this transition away from the dollar. But their evolution over the near term will likely be critical in determining the extent of this shift,” it said.
Morgan Stanley noted that gold is being accumulated by BRICS immensely to take on the US dollar’s dominance. The BRICS alliance is the largest purchaser of gold since 2022, after the US imposed sanctions on Russia. Countries such as China, Russia, India, and South Africa have been steadily buying the precious metal.
BRICS is now diversifying their central bank reserves with gold instead of the USD, noted Morgan Stanley. The US dollar-denominated assets are losing steam as emerging economies turn towards high-value yet safer commodities. The BRICS bloc has increased its gold reserves by over 30% in the last five years.
Not just BRICS, Trump’s Greenland push is also making Europe reconsider its support for the USD, wrote Morgan Stanley. French President Emmanuel Macron gave a speech in Davos calling for Europe to “build bridges with BRICS.”