Latest news: BRICS (Brazil, Russia, India, China and South Africa) economic alliance has had a strong 2024 on its anti-dollarization mission: gold and oil production have become key strategies key to usurping the US dollar.
Led by five founders and recently inducted member states, the bloc aspires to abandon the US dollar as the main global reserve currency.
The Alliance has turned to many areas and resources to achieve this goal, and so far, these areas have worked well.
BRICS countries' gold and oil-based strategies in the latest news
Gold has long been seen as a safe store of value, especially in times of economic uncertainty. The BRICS countries, especially China and Russia, have significantly increased their gold reserves in recent years.
China, also the world's largest gold producer, has accelerated efforts to increase its gold reserves, seeking to make the yuan an international reserve currency.
Russia, on the other hand, has used gold as a tool to protect itself from Western sanctions and to diversify its reserves away from the US dollar.
Both countries are now looking to create a gold-backed currency for international transactions within the BRICS bloc. The approach is aimed at building trust among trading partners and reducing reliance on the dollar.
Oil is another strategic resource in the BRICS plan to dethrone the dollar. Russia, one of the world's largest oil producers, has begun selling oil in currencies other than the dollar, such as the ruble and the yuan.
This is an important step towards de-dollarization, as oil is traditionally traded in US dollars globally.
Furthermore, countries in the Middle East, such as Saudi Arabia, which were once allies of the United States, are increasingly showing interest in diversifying their economic alliances and evaluating the possibility of accepting other currencies in oil trading.
If this trend continues, it could mark a major turning point in the global financial system.
Cooperation and infrastructure with the goal of de-dollarization
BRICS is also investing in financial infrastructure to support de-dollarization.
The New Development Bank (NDB), established by BRICS, was created to finance development projects within the bloc, reducing dependence on Western financial institutions such as the International Monetary Fund (IMF) and the World Bank.
The NDB has begun issuing loans in member countries' local currencies, further promoting the use of national currencies in trade and investment.
Furthermore, the creation of alternative payment systems, such as China's Cross-Border Interbank Payment System (CIPS), offers an alternative to the US-dominated SWIFT system.
This allows BRICS countries to conduct international transactions without going through the dollar, reducing their exposure to US financial sanctions.
Despite the progress, the road to de-dollarization is not without challenges. The US dollar remains deeply entrenched in the global financial system, with most international trade still denominated in dollars. In addition, the dollar’s liquidity and stability make it an attractive option for investors and governments around the world.
However, the BRICS’ commitment to diversifying reserves and promoting the use of national currencies could gradually erode the dollar’s dominance. With geopolitical tensions and economic uncertainty rising, the search for alternatives to the dollar is becoming increasingly relevant.
Conclusion
2024 marks a crucial year for the BRICS economic alliance in its mission to de-dollarize. Gold and oil have become fundamental pillars of this strategy, with the aim of reducing dependence on the US dollar and promoting a more multipolar financial system.
By increasing gold reserves, selling oil in alternative currencies and developing independent financial infrastructure, BRICS is trying to dethrone the dollar and reshape the global economic landscape.
The future of de-dollarization will depend on the ability of the BRICS to maintain cohesion and continue to expand their economic influence. If they succeed, the world could see a significant transformation of the international financial system in the coming decades.
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