BRICS lays out the blueprint for de-dollarization

BRICS is determined to reduce America’s influence and decrease the reliance on the US dollar as the world’s reserve currency. They have expanded their membership to include countries such as UAE, Egypt, Iran, and Ethiopia, with an invitation extended to Saudi Arabia, the top oil producer globally. If Saudi Arabia joins BRICS, they will control a significant portion of the oil and gas market, enabling them to shift towards using local currencies for oil deals instead of the US dollar.
Russian President Vladimir Putin emphasized the potential impact of oil producers in the Middle East rejecting the US dollar, suggesting that it could mark the end of the dollar as a dominant currency. This strategy to target the US dollar’s influence in the oil market is gaining momentum, as the dollar’s share of global reserves is diminishing at a rate ten times faster than the average of the past two decades. The decline is partly attributed to US sanctions and geopolitical conflicts like Russia’s dispute with Ukraine.
Countries are actively seeking alternatives to the dollar, including exploring bilateral currency swaps and independent payment methods. BRICS is even considering the creation of a new common currency supported by real assets, including gold and cryptocurrencies. Analysts predict that this shift could pose a significant challenge to the dominance of the US dollar, as countries increasingly adopt their own digital currencies and payment networks to bypass the dollar. For example, Russia has introduced crude oil futures priced in rubles, while Iran is utilizing alternative settlement methods like barter and oil-for-gold deals.
Chinese President Xi Jinping is a strong proponent of de-dollarization, advocating for a multipolar world where no single currency holds supreme power. Xi strives to promote the renminbi as a global trade currency, aligning with his vision for a fair and equitable international financial system. Russia, with its close ties to China, is also actively building stronger relationships with other countries in Asia and the Middle East to boost local currency trade. However, the potential return of former US President Donald Trump to the presidency could disrupt these de-dollarization efforts. Trump’s previous policies, focused on US interests, led to the country pulling out of international agreements and imposing tariffs, potentially isolating the US in global finance. Nevertheless, Trump’s relationships with leaders like Putin and North Korea’s Kim Jong Un may impact the de-dollarization agenda, leading to closer economic ties between the US, Russia, and North Korea. The extent to which this would reshape US relations with Russia and China remains uncertain.
Overall, BRICS and other countries are actively working towards reducing dependence on the US dollar, seeking alternatives for trade and investment, and aiming to create a more multipolar global financial system.