BRICS Alliance is Developing Its Own Currency to Challenge U.S. Dollar

The BRICS alliance is currently in the process of developing its own currency in order to challenge the dominance of the US dollar.

The BRICS alliance comprising Brazil, Russia, India, China, and South Africa is reportedly in the process of developing its own currency, according to Alexander Babakov, State Duma Deputy Chairman, who made the announcement at the St. Petersburg International Economic Forum in India.

This move could potentially shift the balance of power in the global financial landscape and provide a viable alternative to the current system dominated by the US dollar.

Babakov emphasized the importance of both nations working together to establish a new medium for payments, with digital payments being the most promising and viable option. He suggested that the new currency would be secured by gold and other commodities such as rare-earth elements, which could benefit China, other BRICS members, and not the West.

The idea of a BRICS currency is not new. In fact, members of the bloc were already discussing the creation of a new digital currency for a unified payments system in 2019. This move could potentially lead to a new world order, with the BRICS alliance emerging as a major player in the global economy.

Jim O'Neill, the former chief economist of Goldman Sachs, urged the BRICS bloc to expand their influence and challenge the overwhelming dominance of the US dollar in global finance. In a paper published in the esteemed Global Policy journal, O'Neill stated that "the U.S. dollar plays a far too dominant role in global finance."

This week, China and Brazil made a significant move towards trading in their own currencies, marking a major shift away from the US dollar as the intermediary. This agreement will allow China and Brazil to conduct their trade and financial transactions directly, without the need for the greenback.

This development marks a significant shift in the global economic landscape, with China and Brazil leading the way towards a more decentralized and independent financial system. 

China is already making strides with its CBDC project, while Brazil is experiencing a growing adoption of cryptocurrencies following its legalization as a payment method in late 2020.

As the world becomes increasingly interconnected, it is crucial for emerging economies to have a say in the global financial system. The BRICS bloc, which comprises a significant portion of the world's population and economic output, challenging the dominance of the US dollar could pave the way for a more equitable and inclusive financial system.

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