BRICS has dominated headlines over the past few months. After years of near dormancy, BRICS has increased its relevance on the world stage, which will only grow. Discussion of expansion has been the leading topic of discussion recently, as well as establishing a new BRICS currency and de-dollarization.
The BRICS hype train doesn’t appear to be falling off track anytime soon. With these talks of growth and de-dollarization, what does the future of BRICS look like? Can BRICS become a dominating presence in the world soon?
The Future of BRICS: BRICS Currency To Dominate US Dollar?
One of the missions of BRICS currently is to amass enough support for de-dollarization to overshadow the US Dollar. The possibility exists of BRICS transforming the global financial system by creating a BRICS common currency.
There is the belief that the BRICS Currency can be pegged to the Chinese Yuan, similarly to how Argentina is using it in trade. However, BRICS has embraced other national currencies. As more countries support BRICS and decide to toss away the greenback, the decision on BRICS currency will loom.
BRICS: What does the Bloc mean for the Fate of the US Dollar?
There has been debate on the BRICS alliance’s impact on the US Dollar. USD is already on a tattered path due to inflation and other regulations that are deflating its value compared to other world currencies. However, will a BRICS currency put the nail in the coffin of the US Dollar?
US Secretary of Treasury Janet Yellen disagrees with this idea. Earlier this week, Yellen spoke out about the threat of a BRICS currency and voiced support for the US Dollar. Yellen suggested that an alternative currency to replace the U.S. dollar will not gain steam and could fail upon launch.
Other analysts, however, do say that the BRICS currency can be a threat to the US Dollar that hasn’t existed in decades. With more nations in support of de-dollarization, that threat will remain a possibility surely.
As the BRICS bloc discusses expansion, more nations worldwide are looking to join the alliance. Whether it be through the BRICS New Development Bank or BRICS+, the support for the bloc has grown rapidly. The idea of “shared prosperity” and openness of BRICS are some of the biggest attractors for BRICS. With the BRICS summit scheduled for August, it’s extremely likely that BRICS+ will grow into a much longer organization of countries.
This doesn’t promise world dominance, which is arguably the objective of Russia and China with BRICS. However, it certainly begins carving a path to such.