BRICS Currencies: A New Threat to US Dollar Dominance?

Jakarta, Pintu News – The creation of a new currency by BRICS countries could change the map of global financial power that has been dominated by the United States (US) dollar. With policies that are increasingly oriented towards national interests, developing countries are trying to protect their economies from US foreign policies that are considered reckless.

Introduction: The Birth of BRICS Currencies

BRICS, which consists of Brazil, Russia, India, China and South Africa, is planning to launch a common currency. The initiative aims to reduce dependence on the US dollar in global financial transactions. With growing economies, these countries are seeking to create a more balanced and inclusive financial system.

The launch of this currency will not only affect BRICS member countries, but will also provide an alternative for other countries looking to reduce the dominance of the US dollar. This is a strategic move to enhance economic and political stability in their region.

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Global impact if BRICS currency succeeds

If the new currency gains widespread acceptance, there will be a significant shift in the world’s financial order. The US dollar, which has been the global reserve currency, may face serious competition. This could reduce the US’ economic and political influence globally, especially when it comes to implementing economic sanctions.

Countries previously affected by US sanctions may find new opportunities for economic recovery through closer cooperation with BRICS countries. This new alliance could also strengthen the position of developing countries on the international stage, giving them more leverage in global negotiations.

Changes in the Finance and Trade Sector

The success of the BRICS currency will trigger innovation and diversification in the global financial system. Alternatives to US and Western-led financial institutions, such as the International Monetary Fund (IMF) and SWIFT, may develop. This will create a financial ecosystem that is more multipolar and perhaps more resilient to regional economic crises.

Moreover, with more stable currencies and less reliance on the US dollar, BRICS countries and their trading partners can enjoy lower transaction costs and easier access to capital markets. This will support faster and more inclusive economic growth around the world.

Long-term Implications for the US Economy

If the BRICS currencies manage to reduce the dominance of the US dollar, the US economy may experience some challenges. A decrease in demand for the US dollar could lead to inflation at home, given that the Federal Reserve would find it difficult to export dollars to other countries. It could also reduce the US’ ability to influence global economic policy through sanctions or financial incentives.

However, it could also be an opportunity for the US to adjust its economic and fiscal policies to focus more on strengthening the domestic economy and less on relying on increasingly ineffective global control mechanisms.

Conclusion: The Future of Global Finance

The launch and success of the BRICS currency could be a turning point in modern financial history. It would mark a new era in the global balance of economic power, where developing countries have a stronger voice. While challenges will certainly arise, the potential to create a more equitable and stable financial system is enormous.

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Reference

• Watcher Guru. What Happens If BRICS Currency Succeeds. Accessed on June 2, 2025
• Featured Image: www.bayancenter.org