The BRICS currency is coming: Why the USD
should worry?
The BRICS countries are actively working on creating a single currency, a project recently confirmed by Kazem Jalali, Iran’s ambassador to Russia. This initiative aims to reduce global dependence on the USD and promises to disrupt the global economy if it comes to fruition. This currency could reshuffle the cards of global economic power and deeply impact the dollar. Here are three concrete ways the BRICS currency will affect the USD.
Three Alarming Effects of the BRICS Currency on the USD The creation of a BRICS currency will have several significant impacts on the USD. By adopting a common currency, BRICS bloc members can conduct trade transactions without using the US dollar. This would decrease the supply and demand for dollars on the international stage, potentially weakening its value
The BRICS currency could also erode the position of the USD as the world’s primary reserve currency.
Many countries hold USD reserves to stabilize their economies, but adopting an alternative currency could encourage diversification of these reserves. Such diversification would weaken the USD dominance, thereby reducing its influence on global financial markets.
Finally, the creation of a common currency would allow BRICS countries to strengthen their local currencies. By facilitating internal trade without relying on the dollar, these economies could stabilize and enhance their own currencies. This could challenge the USD in forex markets, offering new competition and diversifying options for international transactions
Towards a New World Economic Order?
The BRICS countries are seeking to free themselves from the grip of the dollar by adopting a common currency. This initiative aims to reduce their dependence on the USD, which has long dominated international transactions but is increasingly avoided by these emerging economies. By promoting internal trade and considering a common currency, the BRICS are striving to strengthen their economic sovereignty
