Quote from Alex bobby on October 5, 2023, 2:04 PM

Introduction of the news about Brazil, India, Russia, china, South Africa move away from US dollar

In recent years, a growing number of countries have expressed a desire to reduce their reliance on the US dollar in international trade and financial transactions. This trend has several key drivers:

1. Geopolitical Factors: Heightened tensions between the United States and various countries have prompted some nations to seek alternatives to the dollar to reduce their vulnerability to US sanctions and economic pressure.
2. Economic Diversification: Countries are diversifying their foreign exchange reserves by holding a mix of currencies, including the euro, Chinese yuan, Japanese yen, and gold, to reduce their exposure to fluctuations in the dollar's value.
3. Bilateral Agreements: Some countries have entered into bilateral agreements to conduct trade in their national currencies rather than the US dollar. Examples include Russia and China, which have promoted the use of the ruble and yuan in their trade relationship.
4. Digital Currencies: The emergence of digital currencies, such as cryptocurrencies or central bank digital currencies (CBDCs), has led some countries to explore these options for cross-border transactions, potentially bypassing the US dollar.
5. Trade Blocs: Regional trade blocs, like the Eurasian Economic Union, have encouraged the use of their own currencies for trade among member states, further reducing reliance on the dollar.
6. Internationalization of Other Currencies: The euro and the Chinese yuan have gained prominence as alternatives to the US dollar in international transactions, partly due to the stability and growth of the eurozone and China's expanding economic influence.

However, it's essential to note that completely abandoning the US dollar in the global economy is a complex and challenging process. The dollar remains the world's primary reserve currency, and the US financial system is deeply interconnected with the global economy. Therefore, any shift away from the dollar is likely to be gradual and may face resistance from financial markets and institutions.

In summary, while several countries are taking steps to reduce their dependence on the US dollar in international trade and finance, a complete abandonment of the dollar is unlikely in the near term due to the dollar's entrenched position in the global financial system. Nonetheless, these efforts reflect a broader desire for greater financial autonomy and resilience in an increasingly interconnected world

Talk of de-dollarization is in the air. Last month, in New Delhi, Alexander Babakov, deputy chairman of Russia’s State Duma, said that Russia is now spearheading the development of a new currency. It is to be used for cross-border trade by the BRICS nations: Brazil, Russia, India, China, and South Africa. Weeks later, in Beijing, Brazil’s president, Luiz Inàcio Lula da Silva, chimed in. “Every night,” he said, he asks himself “why all countries have to base their trade on the dollar.”

These developments complicate the narrative that the dollar’s reign is stable because it is the one-eyed money in a land of blind individual competitors like the euro, yen, and yuan. As one economist put it, “Europe is a museum, Japan is a nursing home, and China is a jail.” He’s not wrong. But a BRICS-issued currency would be different. It’d be like a new union of up-and-coming discontents who, on the scale of GDP, now collectively outweigh not only the reigning hegemon, the United States, but the entire G-7 weight class put together.

Foreign governments wanting to liberate themselves from reliance on the U.S. dollar are anything but new. Murmurs in foreign capitals about a desire to dethrone the dollar have been making headlines since the 1960s. But the talk has yet to turn into results. By one measure, the dollar is now used in 84.3 percent of cross-border trade—compared to just 4.5 percent for the Chinese yuan. And the Kremlin’s habitual use of lies as an instrument of statecraft offers grounds for skepticism about anything Russia says. On a litany of practical questions, like how much the other BRICS nations are on board with Babakov’s proposal, for now, answers remain unclear.

Nevertheless, at least based on the economics, a BRICS-issued currency’s prospects for success are new. However early plans for it are, and however many practical questions remain unanswered, such a currency really could dislodge the U.S. dollar as the reserve currency of BRICS members. Unlike competitors proposed in the past, like a digital yuan, this hypothetical currency actually has the potential to usurp, or at least shake, the dollar’s place on the throne.

Let’s call the hypothetical currency the bric.