Patrick Iturra, Asset/Investment Manager & Consulting April 28, 2023
What is BRICS?
The BRICS group has been the subject of recent attention as a powerful economic bloc, and several countries have shown interest in joining the group. But now, talk of de-dollarization is in the air, and a new currency is being developed for cross-border trade by the BRICS nations. This development complicates the narrative of the dollar’s stable reign as the one-eyed money in a land of blind competitors. As the BRICS countries collectively outweigh the entire G-7 weight class, what does this mean for global trade? In this article, we’ll take a closer look at the potential new members of the BRICS group and the implications of de-dollarization for the worldwide economy.
Talk of De-Dollarization
Last month, Alexander Babakov, deputy chairman of Russia’s State Duma, announced that Russia is spearheading the development of a new currency for cross-border trade by the BRICS nations. Brazil’s president, Luiz Inàcio Lula da Silva, also asked why all countries must 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. A BRICS-issued currency would be different, and it would be like a new union of up-and-coming discontents. The BRICS countries now collectively outweigh the reigning hegemon, the United States, and the entire G-7 weight class. This raises questions about the future of global trade and the dollar’s role as the world’s reserve currency.
Opportunities for Investment and Cooperation
Despite the challenges, the BRICS group offers significant opportunities for investment and cooperation. In 2021, Egypt, the United Arab Emirates, Uruguay, and Bangladesh took up shares in the BRICS bank, demonstrating the growing interest in joining the group. As a new currency develops, the BRICS nations may become an even more powerful force in the global economy. [Learn More: Explore Alternative Investment Options]
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“I don’t sell houses. I grow your Assets” –Patrick Iturra, Asset/Alternative Investment & Management.
