All eyes are on the BRICS summit and the fate of the U.S. dollar will be put to test. A new BRICS currency could wreak havoc on the U.S. dollar and affect a handful of financial sectors in America.
By Vinod Dsouza | Watcher.
Lusaka, May 26 – China and Russia are speeding up their “cutting-edge” payment infrastructure technology to settle international trade with the new BRICS currency. Igor Shuvalov, the Chairman of Russia’s National Economic Development Institution VEB.RF urged both the nations’ leaders to ramp up the payment system before the next BRICS summit.
The BRICS alliance is going to get bigger and stronger as 24 new countries now prepare the join the bloc. The nations are looking to end reliance on the U.S. dollar and accept the new BRICS currency for cross-border transactions. The move adds pressure on the dollar and challenges its hegemony as the world’s reserve currency. Nonetheless, if BRICS expands to BRICS+, the dollar and other leading Western currencies like the Euro and Pound could decline.
Therefore, Western dominance could soon come to an end leading to a new financial order dominated by the East. Developing countries across Asia, Africa, and Latin America are coming together in pushing the de-dollarization efforts into reality. Also, the move could break the U.S. dollar’s global supremacy and destabilize the American economy.
The new and yet-to-be-launched payment system will integrate the upcoming BRICS currency to settle cross-border transactions. The system will also incorporate the Shanghai Cooperation Organization (SCO) group for the seamless transfer of money on the international stage. This puts both the BRICS and SCO currency on the front foot making it easier to trade within the bloc of five nations and with other countries.
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“We urge the government of the Russian Federation and our Chinese partners to act as actively as possible. An independent and efficient infrastructure of payments is necessary not only for ensuring the ‘ruble/yuan’ pair but also for carrying out the most serious transactions in SCO and BRICS currencies,” said Shuvalov.
Shuvalov stressed that the new payment infrastructure boasts “cutting-edge” technology and could be revealed after the BRICS summit. The next BRICS summit will be held in Cape Town, South Africa in August 2023. The alliance of nations Brazil, Russia, India, China, and South Africa will combinedly decide a new currency for global trade.
Russia and China are aggressively advancing in their stance of dethroning the U.S. dollar from the global reserve status. The development has caused cracks in the BRICS alliance with India being skeptical of China’s advancements.
India believes China is using the BRICS alliance as a pawn to advance its quest of attaining global superpower. Read here to know more details about why India feels China might be misusing BRICS for its self-interest.
Also Read: If the West is going East, why is Zambia going West?
However, all eyes are on the BRICS summit and the fate of the U.S. dollar will be put to test. A new BRICS currency could wreak havoc on the U.S. dollar and affect a handful of financial sectors in America.
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