Possible currency of BRICS countries would face the dominance of the dollar

The countries that make up the BRICS, which are Brazil, Russia, India, China and South Africa, would be evaluating an alternative to replace the dollar. This after Luiz Inácio Lula da Silva, president of Brazil, put on the table the idea of ​​de-dollarization. “Every night I wonder why all countries have to base their trade on the dollar,” he said during his speech at the New Development Bank (NDB) in Shanghai.

“Why can’t we trade our own currencies?” he added later. “Who was the one who decided that the dollar was the currency after the disappearance of the gold standard?”.

Currently, the dollar is used for 80% of global currency transactions and by more than 50% for payments, according to Alfonso Peccatiello, founder and CEO of TheMacroCompass. This beats the Chinese yuan, which only comes in at 4.5%.

Likewise, according to the international media foreign policy, a hypothetical currency—) that could be called “the bric”—would be a new union of discontent between emerging economies, whose Gross Domestic Product (GDP) as a whole exceeds the United States and the G7 countries (Germany, Canada, USA, France, Italy, Japan and the United Kingdom. In addition, the European Union).

In addition, they indicate that unlike competitors, such as the digital yuan, this currency would have the potential to usurp the place of the dollar and would bring privileges because the impediment caused by the dollar’s hegemony in international trade would be eliminated. Likewise, it is highlighted that this monetary union would not only be between countries united by shared territorial borders, but that its members could produce a wider range of goods. In 2022 alone, the BRICS posted a trade surplus of $387 billion, largely thanks to China.