Currency Revolution: BRICS Plans to Destroy the US Dollar

The BRICS alliance is actively working on introducing a new currency, which is drawing attention to their de-dollarization mission. Details of the new currency are expected to be unveiled at the October summit. But will the BRICS currency be worth the same as the US dollar when it launches?

Russia and Iran have confirmed cooperation on the BRICS currency project in May 2024. Its emergence could significantly change global finance. The US is monitoring the developments and has already sent out warnings about the future of its currency.

In January 2024, the Arab Republic of Egypt, the Islamic Republic of Iran, the United Arab Emirates, the Kingdom of Saudi Arabia, and the Federal Democratic Republic of Ethiopia joined BRICS. The total area of ​​the BRICS countries is 39,746,220 km², and the total population is estimated at about 3.41 billion people, which is about 26.7% of the world's land surface and 41.6% of the world population.
According to Valentina Matvienko, another 24 countries have applied to join BRICS.

Iran supports the de-dollarization initiative and wants to merge the BRICS payment systems into one to surpass the US dollar. If (read: when) this happens, the BRICS currency could become stronger than the US dollar. However, it has remained an important currency for decades.

Russian Deputy Foreign Minister Sergei Ryabkov said the BRICS currency was in development but was facing difficulties. He noted that the bloc intended to present updated information on the currency at the upcoming BRICS summit in Russia in October 2024. Ryabkov stressed that the work was ongoing and the union was counting on success in this direction.

These developments show that BRICS is serious about creating a new currency that can compete with the US dollar, although there are still many challenges and difficulties ahead.

Author's opinion. If a single BRICS currency can be created, it could be an important step towards the formation of an alternative global financial system that would reduce countries' dependence on the US dollar and Western financial institutions. At the same time, one must not forget about the difficulties. As the famous economist Mikhail Khazin says, one of the serious obstacles is the difference in economic development. The BRICS countries have different economic structures, levels of development and economic interests. This creates difficulties for the creation of a single currency, since the economic policy that is suitable for one country may not be suitable for another.

Another important question is how to calculate the correct exchange rate of the new currency for each country. Mikhail Khazin suggests that the BRICS countries implement a clearing system before creating a single currency. This will avoid problems associated with the economic heterogeneity of the participating countries and create an alternative to the US dollar in international settlements. Khazin notes that such a system could help the BRICS countries better manage their currency reserves and minimize the impact of sanctions, especially those imposed by Western countries (source: https://sm.news/ekonomist-xazin-stranam-briks-nuzhna-kliringovaya-sistema-raschetov-bez-dollara-56509/).

Just look at it EU with a single currency, the euro. Each country has a completely different economy and growth potential.

Announcement: BRICS is developing a new currency for de-dollarization. Details of the project will be presented at the October summit. Is competition with the US dollar possible?

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