According to reports, a coalition of 24 countries is seeking to create a strategic alliance that would challenge the US dollar's status as the world's reserve currency, which it has held for decades. The BRICS group, composed of five economically aligned countries, is said to be in the process of a significant expansion, The Daily Hodl reported.
South Africa’s BRICS ambassador, Anil Sooklal, has revealed that a total of 24 countries are interested in joining the strategic alliance that aims to challenge the US dollar’s role as the world’s reserve currency. The core collective, consisting of Brazil, Russia, India, China, and South Africa, is on the verge of a significant expansion, as 13 countries have formally requested to join, and six others have informally expressed their interest in becoming part of the alliance.
The new members include Saudi Arabia, Iran, Argentina, the United Arab Emirates, Algeria, Egypt, Bahrain, Indonesia, two unnamed East African countries, and one from West Africa, according to Sooklal, who spoke to Bloomberg.
BRICS was formed in 2006 without including South Africa, which joined in 2010. The new form of fiat currency will likely be backed by other assets, including precious metals like gold, said Russian State Duma Deputy Chairman Alexander Babakov, according to the Russian state-owned news agency Sputnik. Additional details are expected to emerge by the summer, with the next BRICS summit scheduled for late August in South Africa.
One of the reasons for the decline in the US dollar's global dominance is the changing geopolitical landscape. The rise of China as an economic power has led to the emergence of the yuan as a rival reserve currency. Furthermore, the US's use of sanctions as a foreign policy tool has led countries to look for ways to bypass the dollar. For instance, Russia has been reducing its holdings of US Treasury securities in recent years as a response to US sanctions.
Another reason that could contribute to the decline is the emergence of central bank digital currencies (CBDCs) and cryptocurrencies. Experts have discussed the impact of these innovations on the dollar's share of the forex market. The US Federal Reserve is currently exploring the possibility of issuing a digital dollar, but it remains to be seen how successful this initiative will be.
The decline of the US dollar's global dominance has implications for the US economy. For instance, a weaker dollar could lead to higher inflation and make imports more expensive. Additionally, if the dollar loses substantial market share, it could have a negative macroeconomic impact on the US, according to experts.
Since the turn of the century, there has been a decline in the dollar share of international reserves. Despite being the world's most important currency since the end of World War II, experts argue that dollar dominance leads to increased trade deficits and job losses. Many countries hold reserves in US dollars for various reasons, including to assure creditors that debt payments can be made in foreign currency.
But the recent accelerated move away from the dollar comes after President Donald Trump's reelection was literally stolen from him and the weak, brain-addled Joe Biden was installed as a puppet. Nations around the world have seen what happened and they believe the U.S. is in major decline now because our system has become so corrupt.
BRICS is just the first global challenge to U.S. dominance. There will be others.