In a monumental shift on the global stage, a remarkable development has unfolded as 20 countries eagerly queue up to join the influential BRICS alliance. The BRICS grouping, originally comprising Brazil, Russia, India, China, and South Africa, has grown to be a powerful coalition shaping the geopolitical landscape.
The decision of 20 nations to align themselves with BRICS reflects a paradigm shift in international relations, as countries seek to forge strategic alliances that transcend traditional geopolitical boundaries.
The implications of this expansion are profound, as the new alliance evolves into a broader coalition that not only consolidates economic prowess but also facilitates a collective approach to addressing pressing global challenges.
BRICS sets eyes on global expansion
In a recent interview, South African Ambassador Anil Sooklal confirmed that 20 new nations have duly submitted applications to join the economic bloc. This happens six months after the BRICS union invited six additional nations: Saudi Arabia, the UAE, Argentina, Iran, Egypt, and Ethiopia.
However, Argentina might be the only nation to reject the BRICS invitation and remain outside the economic bloc.
According to Sooklal’s remarks, only a limited number of developing nations express interest in becoming members of the economic bloc. In an effort to strengthen their domestic currencies, developing countries are abandoning the U.S. dollar for international trade.
De-dollarization attempts are gaining traction as developing countries seek to break links with the US dollar. Additionally, the alliance is the sole hope for establishing a new world order and uprooting the conventional financial structure dominated by the West and the United States.
As a result, the US dollar is at a crossroads and may lose value in the next years.
Over 20 countries formally approached BRICS to become members […] An equal number informally sought to get information to join BRICS. Such a Large interest is a reaffirmation that BRICS is playing a positive role in championing the cause of developing world.
Anil Sooklal
Also, the Ambassador pointed out that the BRICS would experience many more waves of expanded membership.
We agreed on six members and BRICS works on consensus. President Ramaphosa said this is first phase of expansion and it doesn’t mean expansion will stop. You will have countries knocking on the door onto become BRICS members.
Anil Sooklal
A look at the US dollar 1st casualty of BRICS trade dominance
The new economic bloc is building the framework for a future war between local currencies and the US dollar. The BRICS countries have retained their role as key commercial partners and new trade agreements are being signed this year. The new trade accords prioritize local currencies above the US dollar. When trade between two BRICS countries increases, the US dollar is the first to suffer.
China and Saudi Arabia recently struck a trade pact that prioritizes their respective currencies, the Saudi Riyal and the Chinese Yuan, over the US dollar. The three-year deal allows trade to be settled in local currencies up to 50 billion Yuan or 26 billion Riyals, or $7 billion.
As a result, up to $7 billion in cross-border transactions will be settled in local currencies by China and Saudi Arabia. The US dollar will play no role in new currency exchange settlements until it exceeds $7 billion. The decision demonstrates the economic blocs’ determination to abandon the US dollar in favor of local currencies for global trade.
In a nutshell, trade initiated anywhere between the economic bloc countries and emerging countries in local currencies is a blow to the US dollar. The fate of both local currencies and the USD will be decided in the next years.
China leads the de-dollarization agenda
A total of 155 countries have signed on to China’s Belt and Road Initiative and received funding for development projects. However, speculations suggest that BRICS member China may soon use the BRI effort to push the Chinese Yuan ahead of the USD in global trade.
China is attempting to internationalize the Chinese Yuan through BRI, as 155 nations are part of the Communist bloc. According to reports, China is holding off on making the Yuan the de facto payment for BRI projects until the Digital Yuan (CBDC) takes shape.
In other words, countries that receive Chinese loans under BRI may soon return their loans in Chinese Yuan. In the near future, the USD may no longer be used to settle loans with China. If the rule is issued, 155 countries might begin loan repayment in Chinese Yuan rather than US dollars.
