The US dollar remains the world’s dominant reserve currency, but the BRICS alliance is experimenting with different ways to reduce its dependency. These efforts are testing various alternatives and creating a counterbalance to the global financial order. The idea is not to immediately replace the US dollar, but to gradually reduce its use in trade.

Also Read: 9 Countries To Accept BRICS Currency Even Before Launch

Can the US Dollar Succumb To BRICS Pressure?

The answer to this question is partly yes, and partly no. The ‘partly no’ part we will explain at the bottom of the article. Here’s the ‘partly yes’ reason.

Partly yes, the US dollar could succumb to the pressure initiated by the BRICS alliance. Here are all the steps the bloc has taken to keep the USD at bay.

1. Rewrite trade deals and settle payments in local currencies.
2. Launch a gold-backed settlement mechanism called UNIT.
3. Reduce US dollar-denominated assets like Treasuries and diversify Central Bank assets with gold.
4. Plan to launch the BRICS currency and begin to trade in the currency.
5. Bypass the SWIFT payment messaging system with BRICS Pay.
6. Launch digital yuan and other CBDC currencies.

Partly no, because the BRICS alliance is yet to entirely finalize the alternative to the US dollar. The greenback isn’t disappearing soon, and its rival currencies are distantly behind.

1. 80% of the global trade is settled in the US dollar and can be liquidated quickly.
2. Around 58% of the world’s reserves are in the USD.
3. The greenback has better negotiating power and is a trusted currency among traders.
4. The USD has sustained all the whiplashes of the financial markets and still sails strong.
5. Even if the BRICS currency is launched, it is yet to be tested how it fares against the US dollar.
6. The world currently has no other option and has to rely on the US dollar for the majority of transactions.