In light of the decline of the dollar and the rise in inflation in the United States, a former official in the White House indicated that the “BRICS” currency may shake the throne of the dollar.
“The BRICS currency shakes the dominance of the dollar, and paves the way for finally de-dollarization,” said Joseph W. Sullivan, senior advisor at the “Lindsey Group” and an economist at the White House Council of Economic Advisers, during the administration of former President Donald Trump.
Foreign Policy quoted the official as saying that last month, Deputy Speaker of the Russian State Duma Alexander Babakov said, “Russia is now leading the development of a new currency, which will be used for trade between BRICS countries.”
The official pointed out that the talk of foreign governments about liberating themselves from dependence on the US dollar is not new, as these talks have topped newspaper headlines since the 1960s, but have not turned into results.
According to “Foreign Policy”, there are possibilities about the success of the “BRICS” currency, based on economic factors.
As an indication of the return of the dollar’s dominance, one of the measures indicated that the yuan’s share in China’s cross-border payments exceeded last March the US dollar’s share for the first time, and now the yuan’s share is 48%, after it was at zero in 2010.
An expert paints a bright future for the yuan
However, the economist Alexander Nazarov ruled out that the “BRICS” currency would see the light, and instead drew a bright future for the yuan, and stressed that the era of the American currency had ended.
The economist believes that the BRICS countries (Russia, China, India, Brazil and South Africa) can adopt the Chinese currency, the yuan, in trade and transactions between member states.
It is believed that the issuance of a unified currency for the countries of the group will face obstacles, as it is necessary to establish a center for the issuance of common money, and to achieve this, the countries of the bloc will have to give up part of the sovereignty in the economic field.
The expert said in an article: “BRICS member states do not seek to reduce the degree of sovereignty of their policies, but on the contrary, they seek to increase it. That is, a unified “BRICS” currency is impossible in principle, because it contradicts the main unspoken goal of these the organization”.
He pointed out that the yuan can be used against the dominance of the dollar, as the Chinese currency is increasingly important in the foreign trade of BRICS member states and in the world.
He pointed out that other major countries such as India, Russia and Brazil will not give up their own ambitions, and will try to make their currencies at least regional.
The article can be read through the link: “Why does Saudi Arabia need BRICS+ and the Shanghai Cooperation Organization?”