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BRICS Nations Challenge US Dollar, Reshaping Global Trade

Key Takeaways
  • BRICS nations like China and Russia are challenging the dominance of the US dollar in global trade and finance
  • They're making deals using their own currencies or considering a shared digital currency, aiming to reduce reliance on the US dollar and strengthen their economic ties
  • This shift could impact the value of the US dollar, promote multipolar currencies, and change how the world does business
09-Aug-2023 By: Simran Mishra
BRICS Nations Challe

BRICS Nations Challenge US Dollar Dominance, Reshaping Global Finance

A big change might be happening in how countries trade with each other and handle money. The main currency used for international trade and savings, the US dollar, is not as dominant as before. Some important countries like Brazil, Russia, India, China, and South Africa (also known as BRICS nations) are starting to challenge the US dollar's power.

A financial expert said that the US dollar might not be the top currency anymore. This is because these BRICS nations want to rely less on the US dollar for their trade and money dealings with other countries. They're doing this to protect their economies from problems in the US financial system and to become closer in terms of trade and economy.

Lately, these countries have been making deals with each other that don't involve the US dollar. Instead, they are using their own money or thinking about making a shared digital currency for all of them. This helps them save money when they trade, makes their economies more stable, and helps all of them grow together.

China is leading this change with its Belt and Road Initiative. They are making deals that encourage people to use Chinese money (yuan) instead of the US dollar. Russia is also trying to do less with the US dollar because they got punished by Western countries with some restrictions.

This change can mean a lot of things. First, there might be less demand for the US dollar, which could make its value and importance go down. Second, it might lead to a world where a few big currencies are important, not just one.

Even though it's still starting, this change by BRICS nations shows that the way money works around the world is getting different. As these countries get stronger and have more influence, the world's money system might change a lot. 

Also, read - PayPal Announces Launch of Its Own Cryptocurrency Stablecoin

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