Speculations of a new BRICS currency that could challenge the US dollar’s hegemony have been doing the rounds for two years. The bloc has been discussing the prospects of a new currency after the US pressed sanctions on Russia in 2022. China, Russia, and now Iran are aggressively pushing the de-dollarization agenda and making local currencies reign supreme. The move is giving hope to developing countries that their native currencies can have their time in the forex markets.
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However, leading global investment bank Standard Chartered believes that BRICS currency is nothing but a “fantasy”. The US dollar will remain the world’s reserve currency for a long period as no competitor comes close. Around 58% of the global reserves are in the US dollar and have steadily maintained their momentum in the last five years.
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BRICS Currency is a Fantasy, Says Standard Chartered Bank
Eric Robertsen, Standard Chartered’s Managing Director, Global Head of Research, and Chief Strategist branded BRICS currency a “fantasy”. The challenge to uproot the US dollar is harder than imagined as it constitutes a major share of the global trade dynamics. This puts the USD in a prominent position as emerging economies cannot thrive without the currency in its reserves.
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“When people talk about BRICS, there’s this rush to assume that it means that people are going to abandon their currency or abandon the dollar for something different,” said Robertsen. “I think it’s a bit of a fantasy,” he emphasized.
The mock-up of a BRICS currency was displayed by Russian President Vladimir Putin at the 16th summit this year. However, the alliance later confirmed that the currency was not official and was a stunt pulled by Putin in Kazan. In reality, there’s no such thing as a BRICS currency, and is currently a fantasy brewed by Russia and China.
