Speculations about a potential BRICS currency have stirred global conversations, especially since the bloc began exploring alternatives to the US dollar following sanctions on Russia in 2022. Advocates of de-dollarization, including China, Russia, and Iran, aim to reduce reliance on the greenback and empower local currencies in international trade. For developing nations, this shift symbolizes a chance for their currencies to gain prominence in forex markets.
Despite the momentum behind de-dollarization, leading global investment bank Standard Chartered dismisses the idea of a BRICS currency as a “fantasy.” According to Eric Robertsen, the bank’s Managing Director and Chief Strategist, displacing the US dollar is far more challenging than imagined. With 58% of global reserves held in USD and its dominance in trade settlements, the dollar remains deeply entrenched in the global financial system.
At the 16th BRICS Summit, Russian President Vladimir Putin unveiled a conceptual BRICS currency design, sparking speculation. However, the bloc later clarified that the display was symbolic and not indicative of any official plans. Analysts have since labeled the currency as a geopolitical maneuver rather than an imminent reality.
Standard Chartered underscores the structural barriers facing any challenger to the US dollar. Beyond its widespread adoption, the greenback’s stability, liquidity, and integration into global trade networks solidify its status as the world’s reserve currency. Emerging economies, despite their ambitions, remain heavily reliant on USD reserves to facilitate trade and stabilize their own financial markets.
While the de-dollarization agenda gains traction in diplomatic circles, the absence of a viable alternative currency poses significant challenges. For now, the idea of a BRICS currency appears to be more aspirational than actionable. As Robertsen puts it, achieving a unified currency for diverse economies with varying interests is an uphill task.
Also Read: BRICS Expansion: Africa’s Growing Interest in Joining the Global Bloc and Potential New Members
In conclusion, while the BRICS bloc continues to champion financial sovereignty, Standard Chartered’s analysis suggests that the US dollar’s hegemony will endure for the foreseeable future. For global markets, the greenback’s dominance remains unchallenged, keeping its grip tight on the financial world.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
