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- BRICS member countries are already conducting international transactions in their local currencies, limiting their dependency on the U.S. dollar.
- BRICS is expected to launch a new currency or new method of settling international trade in the upcoming summit next week.
BRICS member states have expressed their intention to ditch the USD both as a reserve currency and means to settle international trade. Already, a number of them have been settling trades in their local currencies. In their journey to de-dollarization, some members are buying oil and gas using local currencies.
A few days ago India bought crude oil from the UAE using its national currency, the Rupee. In this deal, India bought one million barrels from the United Arab Emirates using its own currency instead of US dollars. Following this, the U.S. has made a request to Saudi Arabia to continue selling oil in US dollars.
JUST IN: 🇺🇸 United States urges Saudi Arabia to continue selling oil in US dollars, over fears of switching to Chinese yuan.
— BRICS (@BRICSinfo) August 16, 2023
Russia and China are also leading in their effort to de-dollarization. In the last year, the relationship between the two countries has intensified with a majority of its trades being settled in the Chinese Yuan. The two countries had other interests in that Russia has been shut out of the international financial system since its invasion of Ukraine. China on the other hand aims to surpass the U.S. as the world economic leader and fully understands that the U.S. heavily relies on the dollar for its success.
Saudi Arabia has already applied to join the bloc and the bloc is looking to welcome more oil-producing countries. One of those is Argentina which is a leading oil producer and has already applied to join the bloc. With most trades settled in dollars, the USD could be ditched by the international oil market as more countries shift to another single currency or the local currencies of the respective trade partners.
Bitcoin and Crypto Could Play a Major Role in BRICS
BRICS countries have taken respective positions on their approach to Bitcoin and other cryptocurrencies. While some like China have fully banned Bitcoin and other cryptocurrencies, Russia has embraced and gone as far as suggesting using digital assets to settle international trade. India, Brazil, and South Africa have taken a lukewarm stance, giving guidelines on buying, selling, and issuance of digital assets. Regardless, of the stance of the government, the benefits associated with digital assets are undeniable.
Bitcoin and other cryptos such as Ripple (XRP) could offer the bloc massive advantages such as; protection from inflation, transactional speed, low transaction fees, accessibility, transparency, safety, and security.
The BRICS summit to be held in South Africa scheduled to take place next is fast approaching. During the meeting, further details about the expansion of the member states and the bloc’s future plans will be revealed.
