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Could BRICS Take a Digital Stab at US Dollar Dependance?

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One of the most powerful tools at the disposal of America on the global financial market is its US Dollar. The fiat currency of the US is seen as the world reserve and serves to help prop up the powerful Us economy. 

However, even though the US is pleased as punch about this – even Donald Trump tweeted about the power of the Dollar, there is a threat to this dominance and hegemony. In fact, that Trump tweet about Bitcoin gave credence to the fact that Bitcoin and other digital currencies can nullify that financial power.

There are growing rumblings that this new age of digital currencies can be a tool to shake off the dependence on the US dollar, some even suggesting China and its forthcoming cryptocurrency will be a way for them to push for more influence on the global financial stage. 

If China is indeed successful and their digital currency offering does enough to dismount the US as such a monopolistic financial power, no doubt other nations and unions will follow. There is already talk of BRICS using their union to use a digital currency that will lead them away from the Dollar. 

It was reported that the director-general of the Russian Direct Investment Fund (RDIF) Kirill Dmitriev said that the BRICS Business Council was in favor of creating a single payment system for settlements.

BRICS is made up of the nations of Brazil, Russia, India, China, and South Africa. These nations are emerging powers on the global stage, but still, find themselves very much tied to the US Dollar. 

“An efficiently operating BRICS payment system is capable of stimulating settlements in national currencies and ensuring the stability of settlements and investments between our countries, which form more than 20% of the global influx of foreign direct investment,” Dmitriev said. 

The notion of national cryptocurrencies, and even ones for enterprises and political unions are gathering quite a head of steam at the moment. China is, of course, leading the way with its efforts, but other nations are also investigating the benefits that could come from having a digital currency. 

There have even been suggestions that a digital Euro should be developed with German banks being the ones behind the drive there. At the end of October, the Association of German Banks (Bankenverband), presented their case for this form of cryptocurrency. 

If these digital currencies do come to fruition, the need for a global standard like the US dollar will certainly take a hit. This will be unpopular in the US, but it will no doubt benefit the global economy and the scales of power around it.  

Darryn Pollock
Darryn has been interested in the blockchain and cryptocurrency space since he heard about Bitcoin in 2015. He then decided to use his journalism degree to report on this fascinating fintech space in 2016, and has not looked back since.

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