Global Financial Rebellion: BRICS Nations Challenge Dollar Dominance

For the past eight decades, the United States dollar has reigned supreme in global finance, dwarfing other currencies in prominence.

by Faruk Imamovic
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Global Financial Rebellion: BRICS Nations Challenge Dollar Dominance
© Getty Images News / AFP / Pool

For the past eight decades, the United States dollar has reigned supreme in global finance, dwarfing other currencies in prominence. However, a growing consortium of developing nations, weary of the West's overarching influence on global governance and finance, is now pondering alternatives to the dollar.

BRICS Leaders Convene on Financial Strategy

Russian President Vladimir Putin, during a virtual address at the BRICS summit in Johannesburg, proclaimed that the process of moving away from the dollar is "irreversible" and is currently "gaining pace".

This summit saw leaders from Brazil, India, China, and South Africa coming together to discuss various global strategies over three days. Gustavo de Carvalho, an expert on Russia-Africa relations, highlighted to Al Jazeera that the push for alternative currencies is driven more by "practical consideration" rather than ethical reasons.

This sentiment stems from concerns about how reliance on a single, globally-dominant currency might be exploited for political agendas. While demands for lessening the dollar's global dominance aren't novel, recent geopolitical dynamics, escalating tensions between the West and powerhouses like Russia and China, have thrust this issue into the spotlight.

Possible Alternatives: Gold, Cryptocurrencies, or a New BRICS Currency?

At a workshop in Johannesburg, de Carvalho proposed some tentative options. These include adopting a basket of BRICS country currencies, reverting to the gold standard, or even integrating cryptocurrencies.

Danny Bradlow, a distinguished professor from the University of Pretoria, expressed skepticism about both the gold standard and cryptocurrencies. Highlighting the volatility of cryptocurrencies, Bradlow questioned their viability in global trade. "Which cryptocurrency would be the chosen one? How about stablecoins? None of them have proven particularly useful in international transactions," he stated to Al Jazeera. Meanwhile, the notion of establishing a unique BRICS currency faces its share of skepticism.

A common set of standards and values would be essential prerequisites, and achieving such consensus is no small feat. Chris Weafer, an investment analyst focused on Russia and Eurasia, even termed the concept of a BRICS currency a "non-starter", adding that many within governments are well-aware of its distant likelihood.

Bradlow echoed these sentiments, emphasizing the significant disparities among the BRICS economies. The idea of an alternative to the dollar seems "completely fanciful and unrealistic", he noted. With China as the strongest economy in the grouping, other nations would have to grapple with the risks and constraints of aligning their monetary and fiscal policies with China's.

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