BRICS Summit Highlights the Potential Dethroning of the US Dollar
BRICS Nations Consider New Multi-Currency System
Alternative economists have long predicted the inevitable replacement of the US dollar as the world reserve currency and the petro currency by the BRICS nations. The proposed replacement is a new multi-currency system, also known as a "basket system." The US dollar has been the most favored currency for international trade since 1944, when it replaced the British Pound Sterling as per the Bretton Woods Agreement.
The dollar's status, coupled with the end of the gold standard, has allowed the Federal Reserve Bank to print money freely without immediate inflationary consequences. As long as foreign governments, banks, and corporations hold dollars overseas, US inflation can be mitigated despite quantitative easing. However, if the dollar loses its reserve status and the trillions of dollars stored in foreign markets flood back into the US economy, it could result in an inflationary disaster.
Putin Discusses New BRICS Currency System
Given these circumstances, it's not surprising that Russian President Vladimir Putin discussed the potential of a new BRICS currency system during this week's trade coalition summit in Kazan, Russia. Putin is aware that the dollar's reserve status is America's strength, but also its greatest weakness.
At the summit, Putin unveiled a "symbolic" BRICS bank note, suggesting that the plan to abandon the dollar might be closer to reality than many economists expect.
Development of an Alternative to the SWIFT Payment System
Another key topic at the conference was the development of an alternative to the SWIFT payment system, which is controlled by the US and Europe. The SWIFT system is the most efficient way for governments and international banks to transfer large sums of money between countries. Russia was banned from using SWIFT after their invasion of Ukraine, a move that many western analysts believed would ruin Russia's economy. However, this did not happen.
In fact, NATO sanctions ended up pushing the BRICS nations closer together, with China and India significantly increasing trade with Russia and China forming more defined military ties with the Kremlin.
Replacing the Dollar with Central Bank Digital Currencies
Every plan to replace the dollar has centered around the concept of central bank digital currencies (CBDCs) as a way to bypass the dollar's reserve advantage and also to defeat the monopoly of the SWIFT network. The BRICS nations are not the only ones working on such a plan.
Globalist bankers at both the IMF and the BIS have been developing a digital alternative to the dollar system for years. The BIS has already tested CBDCs in several countries, including Australia, Saudi Arabia, and China, with the intention of introducing a cashless economy within the next two years. This initiative is known as 'Project mBridge'.
In conclusion, those who claim that the dollar will not be replaced as the world reserve for many decades are likely mistaken. The process is already well underway.
Bottom Line
The BRICS Summit has brought to light the potential dethroning of the US dollar as the world reserve currency. With the unveiling of a symbolic BRICS banknote and discussions on alternatives to the SWIFT payment system, the shift towards a new multi-currency system seems more plausible than ever. However, the implications of such a change are vast and complex. What are your thoughts on this development? Share this article with your friends and let's get the conversation started. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
