‘The sun never sets on the British empire’ they proudly proclaimed during the late 1800s and early 1900s. The United Kingdom ruled the far-flung corners of the Earth commanding vast resources for more than three centuries. It was considered wild to remotely think that their global dominance would end before the 1950s, as their empire was too big to fall. The same cycle is now occurring with the U.S. dollar and its global presence in trade and commerce for cross-border transactions. BRICS is looking to be the freedom fighter against the US dollar and free countries from its dominance.
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The BRICS alliance has already taken several initiatives in de-dollarization to cut ties with the US dollar. The bloc has reworked trade deals among member nations to settle transactions in local currencies. They are on a world tour convincing other developing countries to follow suit and push local currencies at the forefront. The move will make local businesses thrive leading to an an economy that depends on their own merits. It will also give a boost in the arm to their native economies and local currencies as a whole.
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Long-Term Game: BRICS vs The US Dollar
While these developments might sound and look desperate currently, they could eventually pay off in the long run. BRICS confirmed recently that the de-dollarization agenda is not short-term, but is focused on the long term. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
Also Read: BRICS: Idea of De-Dollarization Is ‘Non Sense’: Analyst
Below are the steps where BRICS is advancing fast in the de-dollarization agenda:
- Settling trade in local currencies
- Reworking trade deals to suit local currencies
- Planning to create a new payment system without integrating the US dollar
- Aiming to launch a new BRICS currency for cross-border transactions
- Working on options to use cryptocurrencies for trade
- Plans for a Central Bank Digital Currency (CBDC) in the works
- Convincing other countries to ditch the US dollar
- Make local currencies the sole tender for oil and gas payments
- Induct many more countries into the alliance making the group financially stronger
- Issue new bonds that cater to their alliance and not the US dollar
If any one of these ideas were successful in the next few decades, the US dollar could face a similar fate to the British Empire. Remember- The US dollar will remain the de facto currency of the world they said. Save this article and let’s come back 30 years later in 2054.