On August 22, the BRICS group, consisting of Brazil, Russia, India, China, and South Africa, is expected to unveil a major new currency development that could weaken the role of the US dollar in global payments and potentially displace it as the leading payment and reserve currency within a few years. This unprecedented move could have a significant impact on world trade, foreign investment, and investor portfolios.
The BRICS group is expanding its membership, leading to the informal adoption of the name BRICS+ for the enlarged organization. Eight nations have formally applied for membership, including Algeria, Argentina, Bahrain, Egypt, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates, while 17 others have expressed interest in joining.
The BRICS+ group represents a substantial and credible alternative to Western hegemony, with its members accounting for a significant share of the world’s population, landmass, energy output, GDP, food output, and nuclear weapons. The new currency will be launched into a sophisticated network of capital and communications, increasing its chances of success.
The BRICS group is also developing an optical fibre submarine telecommunications system called BRICS Cable to connect its members and avoid spying by the US National Security Agency on message traffic carried through existing cable networks. The push to opt out of the dollar system is driven in part by the US’s weaponisation of the dollar through the use of sanctions. Overuse or abuse of dollar sanctions has led adversaries to abandon the dollar to avoid the impact of sanctions, diluting the potency of sanctions and potentially leading to the collapse of confidence in the dollar itself. The BRICS+ group presents a realistic effort to de-dollarize global payments and eventually global reserves