The American Thinker: “The BRICS summit in October is expected to reveal a future plan for BRICS currency. If a new system is developed, it will quickly reduce dependence on the U.S. dollar”

Approximately 150 countries have shown interest in joining the BRICS, thus giving the blockchain solution legitimacy. The world view of the U.S. dollar may be changing more quickly than American leaders realize, writes ‘The American Thinker’.

Russia and China have been looking for ways to continue to trade between the two countries without having to rely on the dollar or the Western banking system.  The two countries have been able to use gold to circumvent sanctions and continue to trade with each other.

“The Russian government has been encouraging Russian citizens to buy gold because the dollar is considered volatile,” the Financial Times reports.

“There is a lot of effort by Russia and China to make the dollar [less influential] — to stop it from being the petrodollar,” Berhard Dahdah, commodities analyst at Natixis told the Financial Times.

There are several countries that have already made trade deals in their own local currencies.  Initially, this business was minor but seems to be increasing.  This is also a trend to watch in terms of global currency and de-dollarization.

Use of local currencies, the development of blockchain technology, and the dramatic increase in gold purchases are all trends that signal a potential change in the financing of global trade.

“Suddenly in the past two years the central banks all around the world are suddenly buying tons and tons of gold,” says a Think School commentator.

India, China, Poland, Singapore, and the Czech Republic all have bought gold.  Buying gold has become a worldwide trend.

The use of gold allows Russia and China to trade without the dollar, but the system is complicated.  It requires Russia to hire couriers to bring documents to Chinese bankers.  The use of blockchain technology would greatly simplify this process.

If the BRICS can create a currency or payment program backed by gold or other commodities, they will have a system that is more stable and reliable that the current U.S. system, where the dollar is backed by little more than faith in the American economic system.

The BRICS plan on using some digital currency using block chain technology which is backed by gold or other commodities. If Russia is able to come up with a digital currency that allows transactions with local currencies and backed by gold, it will be a whole new ball game for the entire world.

Dollar dominance is largely rooted in confidence of the strength of the U.S. economy.  Without the backing of gold, other nations have remained committed to the dollar as long as they perceive the American economy as stable.

Without a gold standard, confidence in the dollar is dependent upon the U.S. dollar maintaining a consistent valuation.  With the U.S.’s excessive debt and printing of money, the world’s perception has changed.

The U.S. has been on a “spending spree” since the initial response to the COVID-19 pandemic, The Heritage Foundation reported at the end of 2023.  The country seems to be spending wantonly and hoping that money-printing will keep the economy afloat.

“This reckless and politically opportunistic spending spree has left the U.S. with a weakened economy, an inflation crisis, and a looming debt crisis,” David Ditch and Richard Stern write for The Heritage Foundation.

“Further, these reckless actions — such as adding more to the federal debt in a 27-month span than was added in the first two centuries of the country’s history — exacerbated already mountainous long-term federal obligations and propelled the country close to a debt crisis.”

The value of foreign money invested in dollars also goes down as the printing of money continues. Inflation affects foreign investment, reducing foreign nations’ interest in relying on the American system. A country can feel safe using gold as a method of exchange because the value is certain.

The BRICS summit in October is expected to reveal a future plan for BRICS currency. If a new system is developed, it will quickly reduce dependence on the U.S. dollar.

There is an existing settlement system that is an alternative to SWIFT. This piece of the puzzle may expedite a change to an alternative currency. This system was created in Russia over ten years ago, so this is not new. Russia has been planning on reducing dollar dependence for quite some time.

Some countries have already launched basic blockchain solutions, and at the upcoming BRICS meeting, the discussion of a standalone mutual payment system is a top priority. Approximately 150 countries have shown interest in joining the BRICS, thus giving the blockchain solution legitimacy.

The world view of the U.S. dollar may be changing more quickly than American leaders realize. As America continues to spend and increase debt, confidence will erode around the world.

“People usually turned to dollars and euros during times of trouble,” write Anastasia Stognei and Leslie Hook for the Financial Times. “But that has all changed.”

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