Brazil, Russia, India, China, and South Africa are the nations making up the BRICS block, and they are actively working to develop a new payment system. Their goal is to end reliance on the United States dollar for clearing international trade?
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Do you know what that will mean for you?
The new payment system of the BRICS block uses local currencies for international transactions and mutual settlement among the organization’s members. At this point the group is probably not ready to form a new BRICS currency to challenge the U.S. dollar. But they are working on it.
We have known this was coming for a long while. The Saudis ended the petrodollar; for cause, and there are still challenges standing in the way of the BRICS nations immediately becoming independent of U.S. currency, but they are motivated and determined.
And it matters.
The BRICS nations comprise 40% of the world population and 26% of the global economy. Soon they will be able to use their new currency to trade with partner nations. They will still have to use the dollar to trade with the Western world, but the BRICS nations have over one-third of the world’s GDP, a total population of around 3 billion people, and a strong desire for more nations to join this evolving multipolar financial framework.
Forty-four nations have already expressed interest in joining BRICShe,r and there are 22 formal applications already in place from places like Saudi Arabia, Iran, Argentina, Egypt, and the UAE.
Vladimir Putin confirmed rumors of a new currency the BRICS nations intend to begin working to create as an “international reserve currency.”
China has called on members to support its Belt Road Initiative and Global Development Initiative, an effort to topple the U.S. dollar. As part of its anti-U.S. activism.
The South African finance minister told Reuters the New Development Bank (NDB) set up by the BRICS needs to increase its local currency fundraising and lending.
China is the NDB’s most successful local currency market, issuing 13 billion Yuan ($1.8 billion) across three “panda bonds” last year, with more than half of its lending in Yuan.
But?
Last year the U.S. dollar was again dominant, as compared to only 4.5% for the Chinese Yuan, but change is in the wind. Western progressives have overplayed their economic strength. Their constant bullying and overuse of economic sanctions have motivated the coming competition.