However, there are several obstacles that may prevent the new currency from succeeding. Bond yields in the BRICS countries may look attractive, but this may not be enough for the new currency to succeed. Additionally, while some countries may want to reduce their dependence on the US dollar, not all want to be separated from the US-led global financial system. Furthermore, there is a lack of autonomy among developing countries’ economic security which could hinder any de-dollarisation initiatives. While Russia and China are leading de-dollarisation initiatives due to their geopolitical rivalry with the US, India is unlikely to play an explicit role in any BRICS plan to reduce the influence of the US dollar.
Germany is not currently a member of the BRICS alliance [6, 7, 8, 9]. However, Iran and Argentina have applied to join the BRICS, and Saudi Arabia, Turkey, Egypt and Afghanistan have expressed interest in joining. If accepted, the new proposed BRICS members would create an entity with a GDP 30% larger than the United States, over 50% of the global population and in control of 60% of global gas reserves. The GDP figure is expected to double to 50% of global GDP by 2030 if these countries are accepted into the alliance.
The current BRICS nations produce around 31.5% of world GDP when adjusted on a purchasing power parity basis, and they produce around 26% of global oil output and 50% of iron ore production used to make steel. They also produce around 40% of global corn production and 46% of global wheat production[9, 10].
Overall, while the creation of a new reserve currency by BRICS may or may not pose a significant threat to the dominance of the US dollar, it is important for the United States to be prepared for any potential shifts in the global economic landscape. The DDA is committed to providing assistance by any means possible to ensure that the USA Federal Government is well-equipped to navigate this evolving landscape.
We recognize the emergence of a new reserve currency by BRICs countries poses significant challenges to the dominance of the US dollar, and we must be proactive in navigating this shifting economic landscape. We believe that our commitment to Coefficient Capitalism and sustainable, equitable, and prosperous growth will provide a framework for success in the years to come, and that the Digital Dollar Association will continue to play a critical role in shaping the future of the global economy.