Latest news: the economic alliance BRICS (Brazil, Russia, India, China, and South Africa) had a strong 2024 in terms of the de-dollarization mission: the production of gold and oil has become a key strategy to dethrone the US dollar.
Led by its five founders and the recently introduced member countries, the bloc is eager to abandon the US dollar as the main global reserve currency.
The alliance has turned to multiple sectors and resources to achieve this goal, and these sectors have worked well so far.
The strategy based on gold and oil of the countries in the latest news from BRICS
Gold has always been considered a safe store of value, especially in times of economic uncertainty. The BRICS countries, particularly China and Russia, have significantly increased their gold reserves in recent years.
China, which is also the largest gold producer in the world, has accelerated its efforts to increase gold reserves, seeking to establish the yuan as 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. This approach aims to build trust among trading partners and reduce dependence on the dollar.
Oil is another strategic resource in the BRICS plan to dethrone the dollar. Russia, one of the largest oil producers in the world, has already started selling oil in currencies other than the dollar, such as the ruble and the yuan.
This is a significant step towards de-dollarization, as oil is traditionally traded in US dollars globally.
Furthermore, the countries of the Middle East, such as Saudi Arabia, which have historically been allies of the United States, are showing a growing interest in diversifying their economic alliances and evaluating the possibility of accepting other currencies for oil transactions.
If this trend continues, it could mark a significant turning point in the global financial system.
Collaborations and infrastructures with the goal of de-dollarizing
The BRICS are also investing in financial infrastructure to support de-dollarization.
The New Development Bank (NDB), founded by the 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 started issuing loans in local currencies of member countries, 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 U.S.-dominated SWIFT system.
This allows BRICS countries to conduct international transactions without going through the dollar, reducing their exposure to U.S. financial sanctions.
Despite the progress, the road towards 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. Additionally, the liquidity and stability of the dollar make it an attractive choice for investors and governments around the world.
However, the commitment of the BRICS to diversify their reserves and promote the use of national currencies could slowly erode the dominance of the dollar. With the increase in geopolitical tensions and economic instability, the search for alternatives to the dollar becomes increasingly relevant.
Conclusion
The year 2024 marked a crucial year for the BRICS economic alliance in its mission of de-dollarization. Gold and oil have become fundamental pillars of this strategy, with the goal of reducing dependence on the US dollar and promoting a more multipolar financial system.
Through the increase of gold reserves, the sale of oil in alternative currencies, and the development of independent financial infrastructures, the BRICS are attempting 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.
