The desire of the BRICS to get rid of the influence of the dollar is certain. The idea, clearly expressed for several months, is undergoing new development which suggests that the plan is taking great strides forward. It is still necessary to resolve the internal quarrels which threaten the cohesion of the group.
BRICS trade interactions increase by 56%
The founding countries of the BRICS are experiencing a remarkable consolidation of their trade relationship. This is what recent information suggests. They show that trade between the founding countries of the bloc of states increased by 56%.
Over the past five years, cross-border transactions between Brazil, Russia, India, China and South Africa have reached an impressive peak of $422 billion.
This significant transactional increase sends a clear message. The one which consists of saying that the global financial hierarchy as we know it is changing. At the very least, these nations appear poised to reshape the global trade landscape.
But this is above all a major point of their stated desire to get out of the dollar. By managing to carry out $400 billion in transactions via their own currencies, the BRICS confirm their ability to challenge the supremacy of the American dollar.
Questioning the Bretton Woods agreements?
It’s almost comical to say it like this, but this new development around the BRICS’ exit from the dollar can be analyzed in this sense. Especially since we can clearly see a clear strategy in this direction emerging despite the skepticism that this suggests.
We know that the BRICS are no longer at the stage of evaluating the options available to them to put an end to the American dollar. For several analysts, a project focused on a monetary alternative would be clearly planned.
The latter would not only consist of the creation of an alternative currency common to the organization. There is also talk of a desire by the BRICS to take advantage of local monetary influence for this purpose.
Furthermore, some mention the prospecting, by the BRICS, of digital solutions with payment potential. If several analysts have spoken of the possible use of a crypto, the yuan, in particular its digital version, seems to be the most likely avenue.
Digital solutions and BRICS payment potential
It must be said that the digital yuan has established itself in international regulations. Which means that China is exploring broader applications. This is without taking into account the emergence of the BRICS Pay system which clearly aims to dethrone the dollar.
The least we can say is that the BRICS plan to defeat the American currency seems to make a lot of room for digital payment methods. We also imagine that a BRICS digital currency, built on blockchain technology, could facilitate cross-border transactions. This is done in a transparent manner, without the complexities of traditional banking systems.
But, there is a downside. The monetary policy envisaged for the BRICS does not seem to be unanimous for the moment. Internally, the organization seems torn by the defense of national interests, with a member like China being suspected of pulling the strings to impose its currency.
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