The BRICS alliance is aiming to launch a new currency to challenge the US dollar and topple it from the world’s reserve status. The bloc came to a consensus that a new tender is required for its survival after the White House pressed sanctions on Russia. Developing nations believe that the US is weaponizing the greenback to make other countries fall in line with its policies. The rift between the East and West is growing as emerging economies want to hold a dominant role in global finances.
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BRICS Currency: What Are the Advantages & Benefits?
The first and foremost advantage of launching a BRICS currency is the diminishing influence of the US dollar in the global sector. The greenback cannot influence financial developments and reduce its power to any other local currency. The move would encourage developing nations to come together and remain united in advancing the de-dollarization agenda.
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Secondly, a BRICS currency will also usher the global finances into a new financial era where developing countries remain in charge. The US dollar will lose out on the supply and demand dynamics leading to the greenback facing deficits. BRICS would benefit from the development as their new currency would gain more trust than the USD.
Thirdly and finally, a BRICS currency would mitigate all risks associated with the global economy and chart its own course. Therefore, even if the US and Europe face a recession, the financial turmoil will not affect developing countries. Cutting reliance on the USD would make their economies self-sufficient and not rely on the greenback’s performance.
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Nonetheless, a BRICS currency is yet to be a reality and these are just hypothetical situations that could take place. There is no guarantee that the new tender could dominate and control global finances. Currently, the US dollar is reigning supreme and could remain at the top for many more decades. Read here for a prediction from Warren Buffett on how long the USD could remain the world’s top currency.