5 Dec 2024
He recently posted that BRICS nations would face 100% sanctions if they tried to develop a currency to rival the US dollar.
The US dollar regulates the global economy, dominates trade and oil transactions, and accounts for around 58% of international reserves. For the BRICS nations – Brazil, Russia, India. China and South Africa – creating a new unified currency will be challenging due to the disparity among the five economies.
China’s $17.8 trillion economy accounts for 70% of the BRICS GDP combined, while the South African economy is below $500 billion. Strained geopolitical relationships and policies create more hurdles. Hence, they are focusing on de-dollarisation.
De-dollarisation aims to reduce the global dependence and vulnerability caused by the USD rather than replace it. The BRICS are boosting the circulation of domestic currencies in worldwide trade.
They are encouraging online transactions via indigenous platforms like India’s UPI and China’s Cross-Border Interbank Payment System (CIPS) as alternatives to SWIFT and the American dollar. They are also shifting their USD reserves to a more balanced currency portfolio.