Amid the alliance’s quest to decrease reliance on the greenback, one BRICS official already confirmed that native currency trade already exceeds deals settled in the US dollar. Indeed, the vice chairman of the BRICS Chamber of Commerce and Industry, Sameep Shastri, confirmed the alliances continued to move away from trade in the Western currency.
De-dollarization has remained a focus for the BRICS bloc. With the 2024 Annual Summit fast approaching, the geopolitical sector is expecting a massive announcement from the group. Specifically, there is anticipation that its blockchain payment system could be set to debut.
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BRICS Trade Already ‘Eradicated’ US Dollar, Official Says
Throughout the last year, the BRICS bloc has challenged the US dollar’s dominance. The bloc has committed to lessening international reliance on the asset. That has driven a global shift. Since 2002, global reserves held in the greenback dropped 14%, according to the Atlantic Council. Indeed, the metrics align with the first full year of operation for the five-nation collective.
The bloc has come a long way since then. Now, one BRICS official has confirmed that national currency trade already exceeds deals settled in the US dollar. Indeed, Shastri noted that trade agreements rely on native currency settlement as a cost-effective measure. Something that was only faster tracked by Western sanctions on alliance nations.
“I already feel that it’s already overtaken because the countries are very happy doing trade [in their own currencies],” Shastri said. “When you look at a very simple micro level, I buy ‘X’ product from Russia, pay a dollar change rate in India, and then provide the service back, pay the dollar change. So there’s an extra cost behind it, which is now eradicated when I directly [pay] with Ruble or with Rupee,” she added.
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This looks to be the end goal for the economic alliance. The development of BRICS pay appears to be a way to further this infrastructure. The system would allow the global south to create a method of trade settlement similar to the West’s SWIFT.
With the bloc already embracing this kind of trading, the system should only drive trade even further. That would drive US dollar usage even lower. According to Shastri, the bloc is also looking into accepting “some digital currencies,” aligning with participating countries’ regulatory standards.
That would only encourage even more deviation from the greenback. It would also throw crypto development for these countries into overdrive. Its presence could provide yet another avenue of development for trade dealings. Along with this is the continued de-dollarization focus of the bloc.
