The BRICS alliance aims to pull the US dollar down from the global reserve currency and trample its dominance. Despite multiple efforts to uproot the USD, the bloc remains unsuccessful in attempts to de-dollarize. The greenback remains the dominant currency and a force to reckon with in the forex markets. Around 58% of the world’s reserves are in the USD, and cutting ties with the currency will prove fatal to the prospects of emerging economies.
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The US pressing sanctions on countries of their dislike is what led to the de-dollarization process in the first place. Countries such as Russia, Iran, and Belarus, among others, have been severely impacted by sanctions pressed by the US. On the other hand, BRICS member China has teamed up with these nations to further the de-dollarization agenda. China is looking to capture the global economy by pushing the Chinese yuan ahead for trade and not the US dollar.
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BRICS: US Biggest Threat to the Dollar
A recent Bloomberg opinion report states that the biggest threat to the dollar is not BRICS but the US itself. The report explains that Trump’s threats won’t do much as the USD’s power is mostly dependent on American reliability. America’s larger-than-life GDP made it gain an “exorbitant privilege” to control the reserves of the world’s central banks. The development made the Federal Reserve, US officials, and politicians tolerate deficits that could have tanked the economies of any other country.
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Therefore, the US poses the biggest threat to the dollar compared to BRICS or any other alliances of developing countries. “If Trump wants to maintain the dollar’s primacy, he should recognize that its value is not dependent on American power and threats, but on American reliability. Overreach — whether through ad hoc sanctions, meddling with the Federal Reserve, unilateral tariffs or geopolitical confrontations — poses a far greater threat to the US currency than anything the BRICS countries could possibly devise,” it read.