- The difference in perception among BRICS nations is impacting the de-dollarization efforts.
- Should the de-dollarization agenda intensify, Bitcoin remains a viable replacement.
Member countries of the BRICS Group (Brazil, Russia, India, China, and South Africa) are considering the feasibility of having a unified currency when a significant percentage still utilizes the United States dollar for cross-border transactions.
BRICS De-Dollarization Indecision
Speaking at the just concluded BRICS Summit 2023, Brazilian President Luiz Inacio Lula da Silva reiterated the need for members of the bloc to come up with an alternative to the USD. He pointed out that this alternative currency would protect the BRICS Group from the fluctuating wave of the dollar exchange rate.
However, a close consideration of the economic, political, and geographic differences that characterize these nations suggests that the vision for a unified currency may be presently unrealistic. Plus the fact some of these member states have demonstrated varying levels of enthusiasm towards the de-dollarization initiative.
South Africa in particular has shown no excitement about questioning the potential hegemony of the U.S. dollar. In an announcement that came as a surprise to many, South Africa’s BRICS Ambassador, Anil Sooklal, clearly stated that they are in no way looking to challenge the USD. A few days before the BRICS Summit 2023, Sooklal said that BRICS would not be discussing de-dollarization efforts at the event that was held in Johannesburg.
India was more specific on its stance on implementing a new currency to contend with the dollar and has rejected the notion outrightly. Subrahmanyam Jaishankar, India’s Foreign Minister was quick to say that “there is no idea of a BRICS currency.” Russia’s President Vladimir Putin was not so clear on his stance as he did not openly endorse the concept. He, however, hinted at leveraging national currencies for increased trades.
China’s President Xi Jinping remains diplomatically quiet about the currency issue, but it seems like the Asian country might entertain the subject. This is due to its robust economic and financial influence which may transform a common currency into an extension of the yuan.
Bitcoin (BTC) for USD Replacement or Not?
While the BRICS Group’s plan to dethrone the USD with another unified currency is laudable, the diverse agendas and priorities of its member countries make the feat a herculean task that may need more effort to achieve.
Some experts opine that Bitcoin (BTC), the leading digital asset may be the only contender against the dollar. It is rumored that some countries are contemplating the use of the crypto asset to complete global trades. At the same time, it is worth noting that it may not be a suitable alternative for these nations owing to the different regulations surrounding digital assets from one country to the other.
China remains anti-crypto and is still cracking down on crypto trading. The country has made significant efforts to reduce BTC trading to the barest minimum on its shores. Therefore, the possibility of utilizing BTC as an alternative currency for BRICS nations is complicated as it will come with many legal and regulatory hassles
