BRICS countries continue their de-dollarization mission at a rapid pace to eliminate the US dollar-dominated financial system. After expanding to 10 countries in August 2023, the BRICS alliance continues to practice trade in local currencies and the development of a BRICS currency to dethrone the US dollar in the global market. Now, BRICS countries are taking the next step with multiple agreements to abandon the use of the dollar altogether.
Russia and China, the founding countries of BRICS, are leading the way in de-dollarization and have agreed to multiple agreements in local currencies. According to Russian Prime Minister Mikhail Mishustin, business relations between the two countries are booming, with bilateral trade already reaching $200 billion “ahead of schedule.” Furthermore, the US dollar has been depreciating for 20 years amid BRICS’ de-dollarization efforts, and changes in international sentiment are threatening its status as the world’s key currency.
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At least 16 countries have expressed interest in joining BRICS to abolish the US dollar. This in turn only weakens the US dollar’s financial system and dominance. The further development of a BRICS currency, which could materialize in 2024, will further weaken the US dollar. Throughout 2023, discussions regarding the BRICS currency were prominent. Moreover, they are combined with overall de-dollarization efforts by alliances and interested external agencies.
Will the US dollar financial system be abolished by BRICS in 2024?
BRICS may be on track to completely weaken the US dollar financial system by 2024, as several countries around the world seek to end their dependence on the US dollar. However, this is not yet considered an easy feat. The U.S. currency has reigned supreme in world trade for decades. We have never seen the kind of threat posed by BRICS. It will take much more effort to abolish the US dollar as a financial institution globally. Furthermore, support for the US dollar and the US overall remains much higher than for the BRICS.
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On the other hand, the BRICS alliance could strengthen the voice of developing countries. This could further increase support for overthrowing the U.S. dollar financial system. If these countries join BRICS in 2024 and accept transactions in BRICS or local currencies, the US dollar could be in turmoil. But again, the BRICS still have much work to do to achieve this.