The geopolitical landscape is poised for a seismic shift as the BRICS group – Brazil, Russia, India, China, and South Africa – expands its membership for the first time in over a decade. The addition of Argentina, Egypt, Ethiopia, Iran, the United Arab Emirates, and Saudi Arabia has sparked discussions about the implications for global economics, particularly the future of the dollar, and how this might influence the cryptocurrency space.
BRICS nations have long aimed to strengthen their collective influence as a counterweight to the Western-dominated world order. The inclusion of energy giants Saudi Arabia, Iran, and the UAE lends strategic weight to their mission. Yet, some experts, such as Gregory Daco of Ernst & Young, remain skeptical about BRICS’ near-term ability to rival Western powers like the G7, citing divergent priorities among its members.
One of BRICS’ ambitions is de-dollarisation, aiming to reduce dependency on the dollar for international transactions. However, this goal faces considerable challenges due to the lack of alignment and trust among member nations. While a common BRICS currency has been discussed for years, experts like Jim O’Neill and Neil Shearing argue that the proposal remains impractical, given geopolitical tensions and differing economic agendas, especially between China and India.
Although a BRICS common currency is unlikely, the bloc’s resolve to lessen reliance on the dollar is evident. The group has pledged to promote the use of national currencies in international trade. Russia’s President Vladimir Putin has noted the momentum behind the “irreversible process of the de-dollarisation of our economic ties.” Moreover, discussions around facilitating transactions in local currencies indicate a collective desire to move away from the dollar.
In this context, the question arises: how might this shift impact the cryptocurrency space? Cryptocurrencies have often been touted as an alternative to traditional fiat currencies, and their prominence has grown in recent years. While the establishment of a BRICS common currency seems distant, the momentum towards de-dollarisation could bolster interest in cryptocurrencies as a means of conducting international trade beyond the constraints of traditional financial systems.
However, challenges persist. The dollar’s dominance in global foreign exchange transactions and official reserves remains substantial. Crypto’s volatility, regulatory uncertainties, and the lack of a unified framework could hinder its widespread adoption as a direct replacement for fiat currencies.
Finally, as BRICS welcomes new members and strives for a more equitable global order, the dollar’s reign faces challenges but remains resilient. The prospect of a common BRICS currency is distant, leaving room for cryptocurrencies to capture attention as potential alternatives. Nevertheless, the road ahead for both de-dollarisation and crypto adoption is complex and influenced by a multitude of geopolitical and economic factors.
