The BRICS alliance is keen on launching a new currency to take on the U.S. dollar for cross-border transactions. The bloc of five nations will meet in South Africa to combinedly decide on the formation of a new currency. The next BRICS summit will be held in August and ideas to challenge the U.S. dollar’s global hegemony will be considered. A total of 41 countries have expressed interest to trade in the soon-to-be-released BRICS currency. Read here to know the full list of nations that want to settle international trade in the new currency.
BRICS Idea To Challenge the U.S. Dollar Loses Steam?
Signs of cracks within the BRICS alliance are growing a month before the next summit. India’s External Minister S. Jaishankar hinted that India could back out from the formation of the new currency. He added that India wants to strengthen its native currency, the Rupee, and not other tenders. Read here to know why India is worried about China using BRICS for its self-interest and world domination efforts.
Surprisingly, Leslie Maasdorp, the Vice President of the BRICS bank, the New Development Bank (NDB) echoed statements similar to Jaishankar. He said to Fortune, “The development of anything alternative is more a medium to long-term ambition.”
The BRICS bank VP added, “There is no suggestion right now to create a BRICS currency.” Therefore, BRICS ambassadors seem to be slowly back walking from the idea of launching a new currency. Nonetheless, Maasdorp stressed that the idea to take on the U.S. dollar remains to be a long-term goal. Therefore, if the BRICS currency fails, the bloc would find other new means to find alternative currencies for global transactions.
In conclusion, we will have to wait and watch until the next summit to see how the idea of challenging the U.S. dollar plays out. Currently, the goal to uproot the U.S. dollar remains a strong motive for developing countries.