20h00 ▪
4
min reading ▪ by
Luc Jose A.
Dedollarization, the BRICS’ flagship ambition, has just suffered an unexpected blow. Despite years of concerted efforts to erode the dominance of the US dollar, a new report from the Atlantic Council finds that these initiatives have failed to seriously threaten the greenback’s supremacy. This unexpected finding calls into question the viability of the BRICS’ economic strategies.
Atlantic Council Report: An impasse for BRICS dedollarization
The report from the Atlantic Council’s Center for Geoeconomics revealed surprising results on BRICS dedollarization efforts. Despite ambitious initiatives to reduce global dependence on the US dollar, these efforts have not produced the desired effects. “ The dollar continues to dominate foreign exchange reserves, commercial transactions and currency exchanges globally, » says the report. Indeed, data shows that the dollar still represents 58% of global reserves, while the euro, in second place, represents 21%.
The BRICS had implemented several strategies to challenge the dominance of the dollar, including the creation of new cross-border payment systems. However, these initiatives are still at an early stage and face significant regulatory and liquidity challenges. The report also highlights that “ all potential rivals, including the euro, have limited ability to challenge the dollar in the short term. »
In conclusion, although BRICS has taken notable steps to promote the use of local currencies in international trade, the impact of these measures remains limited. The US dollar maintains its dominant position, and BRICS efforts to restructure the global monetary landscape appear to be encountering major obstacles that are holding back their progress.
The limits and challenges of BRICS dedollarization
The Atlantic Council report emphasizes that, despite some bilateral agreements in local currencies, the share of these transactions is too small to seriously affect the supremacy of the dollar. In reality, BRICS dedollarization policies have had little or no effect on the dominance of the dollar, which continues to reign supreme over international trade and foreign exchange reserves.
BRICS countries’ currencies, such as the Chinese yuan and Indian rupee, have seen declines against the dollar, further aggravating the situation. Paradoxically, central banks in many countries have increased their reserves in dollars rather than yuan this year, despite China’s continued efforts to promote its currency.
The future prospects for BRICS remain uncertain. The dollar’s continued dominance could mean that more coordinated approaches and innovative solutions are needed to truly compete with the US currency. The Atlantic Council report suggests that without a significant overhaul of current strategies, BRICS efforts to reshape the global monetary landscape will remain limited.
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Luc Jose A.
A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I took the commitment to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to relay the latest technological innovations and to put into perspective the economic and societal issues of this ongoing revolution.
