In light of the fall of the dollar and rising inflation in the United States, a former White House official pointed out that the BRICS currency could shake the throne of the dollar.
“The BRICS currency undermines dollar dominance and paves the way for eventual de-dollarization,” said Joseph Sullivan, senior adviser to the Lindsey Group and economist at the White House Council of Economic Advisers, during the administration of former President Donald Trump.
Foreign Policy quoted an official as saying last month Russian State Duma Vice Speaker Alexander Babakov said: “Russia is now leading the development of a new currency to be used for trade between the BRICS countries.”
The official pointed out that talk by foreign governments about freeing themselves from dependence on the US dollar is not new, as those talks have been making headlines since the 1960s, but have come to nothing.
According to Foreign Policy, there is a chance of success for the BRICS currency based on economic factors.
As an indicator of the dollar’s return to dominance, one measure showed that the yuan’s share of China’s cross-border payments surpassed that of the US dollar for the first time in March last year, and the yuan’s share is now 48% after it was at zero in 2010.
Expert paints bright future for yuan
However, economist Alexander Nazarov ruled out that the BRICS currency would see the light of day, and instead painted a bright future for the yuan, emphasizing that the era of the US currency was over.
The economist believes that the BRICS countries (Russia, China, India, Brazil and South Africa) can use the Chinese currency, the yuan, in trade and transactions between member states.
It is believed that the issuance of a single currency for the countries of the group will face obstacles, since it is necessary to create a center for issuing common money, and in order to achieve this, the countries of the bloc will have to give up part of the sovereignty in the economic sphere.
The expert notes in the article: “The BRICS member states do not seek to reduce the degree of sovereignty of their policy, but, on the contrary, seek to increase it. That is, the single currency “BRICS” is impossible in principle, because this is contrary to the main unspoken goal of this organization.
He pointed out that the yuan could be used against the dominance of the dollar as the Chinese currency becomes more important in the foreign trade of the BRICS countries 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 at the link: “Why does Saudi Arabia need BRICS+ and the Shanghai Cooperation Organization?”
Source: RT + Foreign Policy
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