BRICS and ASEAN countries ditch US dollar for new digital currency and local currencies

Growing economic powers shift away from dollar domination towards new forms of currency for international trade

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The BRICS group of countries – Brazil, Russia, India, China and South Africa – is working on creating a new form of currency to offset the US dollar and be used for trade.

This was reported during a Russian-Indian business forum held in New Delhi, India, by Alexandr Babakov, the vice-president of Russia’s lower house of parliament.

Babakov said that the group of countries is moving forward in the creation of a digital currency “or another completely new form of currency” for international payments “in the near future,” according to Sputnik Mundo.

The parliamentarian said that the transition to cross-border payments in national currencies – away from the US dollar – is a first step for BRICS.

BRICS is an economic-trade association of five countries whose economies are among the most important in the world. [1]

Babakov suggested that gold, metals, land and other commodities could be used to back the BRICS single currency.

At the same time, he did not rule out the possibility of the creation of a new currency by the members of the group. This, because the dollar and the euro “are not backed by anything”, in his opinion.

The vice-president of the Russian Duma said that the official announcement on this new currency will be made during the summit of BRICS leaders, scheduled for next August in South Africa.

Southeast Asian countries also ditch the US dollar

In line with the intention of the BRICS, the countries that make up the Association of Southeast Asian Nations (ASEAN) are also considering abandoning the U.S. dollar, the euro and the yen. The above to focus on transactions using local currencies.

During an official meeting of finance ministers and central bank governors from ASEAN nations, the need to “reduce reliance on the U.S. dollar, euro, yen and pound sterling” for financial transactions was discussed.

The ASEAN countries are proposing a local currency transaction scheme, which would allow cross-border digital payments between these nations and promote the use of local currencies for trade, according to a press release.

ASEAN is an intergovernmental organization that brings together Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. [2]

During the meeting, Indonesian President Joko Widodo urged the region’s leaders to use credit cards issued by local banks and gradually abandon foreign payment systems such as Visa and Mastercard.

In his view, moving away from payment systems developed in the Western hemisphere is necessary “to protect transactions from possible geopolitical repercussions. He alludes to the possibility of transactions being censored by international sanctions, for example.

The US dollar is in trouble

With BRICS and ASEAN thinking of abandoning the US dollar and focusing on local currencies for transnational negotiations and trade, the US currency appears to be in serious trouble.

Those who have historically used the greenback for international payments are now joining operations conducted with another currency, in clear opposition to the dollar standard that has already ruled the world economic spectrum for eight decades.

China has completed the first international purchase of an oil product paid for in yuan. It was an import transaction from the United Arab Emirates, a country that also opposes the continued use of the dollar for cross-border obligations. [3]

It was also reported that Brazil and China signed trade agreements in which the US dollar was conspicuous by its absence, giving greater visibility to the Chinese yuan and the Brazilian real. [4]

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