Will the US dollar face a challenge? BRICS countries will create their own currency!

BRICS Currency: The discussion of the BRICS nations’ own currency came to light when, at the BRIC conference held in Johannesburg, South Africa in August 2023, Brazilian President Luiz Inacio Lula da Silva discussed the issue of mutual exchange between the BRICS countries. It was proposed to create a common currency for trade and investment. However, at that time the member countries did not give much importance to this idea because there were many challenges in its path. There are many economic, political and geographical disparities among the BRICS countries.

BRICS summit is going to be held in Kazan, Russia from 22 to 24 October 2024. Before the summit, on BRICS’ own currency, Russian President Vladimir Putin said, the time has not come yet. However, he said, this organization of 10 countries is exploring the possibility of using digital currency for mutual trade and investment. He told that Russia is continuously talking to other countries including India on this issue.

The member countries included in BRICS constitute 45 percent of the world’s population and have 28 percent share in the global economy. Obviously the BRICS group of countries has a big influence in the world. Due to this effect, the demand of BRICS countries for their own currency has been increasing so that the influence of dollar can be challenged. BRICS has the ability to challenge the dominance of the US dollar by creating its own currency. However, replacing the dollar is not so easy for any currency.

Experts from many countries have been saying that apart from the American currency dollar, another currency in the world should get the status of reserve currency so that the dominance of the American dollar can be challenged. There is discussion all over the world about de-dollarization. Reducing dependence on the US dollar as a reserve currency is called de-dollarization. Central banks buy dollars to replenish their foreign exchange reserves, from crude oil to other commodities; dollars are also used for bilateral trade. In 1920, the dollar replaced pound sterling as the reserve currency. Global tension, trade war, economic sanctions are the main reasons due to which de-dollarization is being discussed in the world but no result has been found yet.

At the BRICS conference in 2023, the President of Brazil had said that countries which do not use the US dollar should not be forced to use the dollar for trade. He had said that with BRICS countries having their own currency, payment options would increase and it would also help in reducing currency fluctuations.

If BRICS countries create their own currency, it could cause a major blow to the supremacy of the US dollar. Many countries believe that a major challenge to America and its powerful currency dollar can be given only if America’s economic strength is attacked. 60 percent of the foreign exchange reserves held in central banks around the world are present in the form of dollars.

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