The BRICS alliance will decide on the formation of a new currency at the next summit in Johannesburg in August. The soon-to-be-released currency will take on the U.S. dollar and challenge its status as the global reserve. On the heels of the next summit, South African BRICS ambassador Anil Sooklal warned that the U.S. dollar days could soon come to an end. He explained that developing countries are looking at alternative currencies as holding the dollar as reserves is burdensome.
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BRICS is an acronym for Brazil, Russia, India, China, and South Africa. The bloc is looking to strengthen ties with other nations and trade in local currencies rather than the U.S. dollar. The alliance aims to put the U.S. dollar on the back foot and reduce its demand in the global markets.
BRICS Warn That the ‘U.S. Dollar Days Are Over’
In a recent press conference, Sooklal warned that the U.S. dollar days could soon be over with the emergence of new currencies. “What we have said and we continue to deepen is trading in local currencies and settlement in local currencies.”
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He added, “The days of a dollar-centric world are over. That’s a reality. We have a multipolar global trading system today. BRICS started a process that has been expedited as a result of the conflict, as a result of unilateral sanctions.”
However, the success of the BRICS currency will only be known after it’s launched into the foreign exchange markets. The U.S. dollar is currently the de facto currency with the Euro, Pound, and Yen. The Chinese Yuan is only gaining prominence now due to the U.S. sanctions against Russia.
Also Read: U.S. Economy To Reach Hyperinflation if BRICS Becomes Global Currency
Nonetheless, the American economy could be impacted by the formation of a new BRICS currency. Read here to know what could happen to the U.S. dollar if BRICS launch their currency.