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Home NewsLatest News 3 Ways the Alliance is Dethroning the US Dollar in 2024

3 Ways the Alliance is Dethroning the US Dollar in 2024

by bitcoinews.us


Following de-dollarization plans throughout 2023, the BRICS is set to continue its hope of dethroning the US dollar in 2024. Indeed, the alliance has not halted its hopes of decreasing the international usage of the Greenback. However, in a post-alliance world, it may be poised to have far more effective initiatives in place for the coming year.

The US Dollar is undoubtedly still the king of global currencies. It still maintains a place as the top global reserve asset in the world. However, the BRICS bloc has already surpassed the G7 nation in GDP (PPP). Moreover, its recently made official expansion effort could be preparing it to make massive strides in its de-dollarization plans.

So, what are the 3 ways the BRICS bloc is seeking to dethrone the US dollar?

Declining US Reserves by Central Banks

us dollar malaysia ringgit currency brics
Source: Dreamstime.com

Also Read: BRICS Offers Bonds Worth $28 Billion in Local Currency, Not US Dollar

Although the US Dollar is still clearly maintaining its dominance, it is also facing massive competition. Moreover, that is no more obvious than in the long-standing decline of US dollars held by central banks.

This is not an anomaly that can be attributed to BRCIS necessarily. Contrarily, this is the continuation of a long-standing trend for the greenback. Indeed, over the last two decades, the foreign reserves held by central banks have fallen from more than 70%, to currently below 60%.

That figure may not seem like a dramatic decrease, but it is indicative of a wider narrative. Central banks throughout the globe have sought to better diversify their economic presence. Subsequently, they have lessened their reliance on the dollar. If they are willing to decrease their holdings of the most traded and most valuable currency on the planet, what does that have to say about the shifting tide?

Global Trade and Energy Production

saudi arabia oil brics us dollar local currency
Source: Reuters

Also Read: Vivek Ramaswamy Calls BRICS Common Currency a Threat to US

After the BRICS expansion during its 2023 annual summit, the global power balance began to shift. Indeed, through the addition of the United Arab Emirates (UAE), Saudi Arabia, Egypt, Ethiopia, and Iran there emerged a clear leader in energy production and global trade.

The US has been dropping its share of the world’s economic output in recent years. Conversely, China has ascended as the most dominant output nation in the world. Alongside them, the BRICS bloc features countries that are selling and purchasing oil far beyond other collectives.

What makes matters worse for the greenback, is that the BRICS bloc is settling their trades outside of the dollar. Therefore, the currencies being used by the bloc are being made more valuable, while the adverse is occurring in the United States currency. Subsequently, the battle for currency remains probably the most important dynamic of the BRICS plan to continue dethroning the US dollar in 2024.

Rising US Debt and Rising Local Currency Usage

Also Read: BRICS: Bitcoin Emergence Could Help Ditch the US Dollar

Finally, the BRICS ascension against the US Dollar is deeply tied to the rising US debt. Indeed, its debt currently exceeds $33 trillion and is more than 120% greater than the country’s output annually. These kinds of developments are why the globe is starting to focus on diversification. The inflationary shocks have affected the global economy, and debt default has become increasingly worrisome in recent years.

Moreover, as previously mentioned, challenger currencies are presenting more beneficial alternatives. The BRICS alliance is working symbiotically to increase their local currency usage. However, they are also set to be developing a BRICS currency that could debut as soon as this year.

That currency could have massive implications. Although many have expressed skepticism on whether it will work, the alliance’s favoritism of the idea is undeniable. If that comes to fruition this year, and the bloc accepts its presence full-heartedly, the US dollar will be facing a massive challenger. BRICS has proven to be a dominant trade alliance, and implementing their currency should have immediate ramifications on global economic developments.



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