What do you think of the BRICS nations uniting to establish a single, centralized currency to take the place of the US Dollar as the global reserve currency? When I asked some financial whizzes in the USA this question, they physically laughed at me. Let’s be practical, they told me. The USD is used in about 90% of all foreign exchange transactions worldwide. The US Dollar does, in fact, completely rule the financial markets.
Some of you may respond, “The BRICS countries are going to back their currency with gold.” They receive the following reply from Americans: “Good luck backing your currency with gold.” The US owns twice as much as the entire group of BRICS nations. And indeed, Xi Jinping and Vladimir Putin will be able to agree on economic issues. Even if it were true, this isn’t the case. As you can see, the global reserve currency does not suddenly shift. Although the US overtook the UK as the world’s largest economy in 1916, the US dollar did not become the global reserve currency until 1944, and it needed a World War to bring about this transition.
Although it may seem logical, it would only be possible if the BRICS countries decided to establish a common currency to settle trade while each member maintained its own. Additionally, it would be highly detrimental to the economies of all the BRICS countries. Additionally, it would significantly lessen the possibility of Yuan internationalization. Why did Saudi Arabia, the United States, Japan, or any other of China’s key trading partners embrace the yuan if China’s closest allies are refusing to use it?
Consequently, let’s put an end to the “BRICS vs. USD” issue.
Georgios Ardavanis – 02/09/2023