A Quiet War Is Brewing and It’s About More Than Money
The BRICS alliance Brazil, Russia, India, China, South Africa (now joined by others like Egypt, Iran, and Saudi Arabia) is no longer just a geopolitical side note.
It’s an economic insurgency.
One that’s now aimed at the heart of the global financial system: the U.S. dollar.
As BRICS nations push to launch a shared currency backed by gold or commodities, the question arises:
Can it dethrone the dollar or is this another de-dollarization headline that fizzles?
Let’s break it down.
Why the Dollar Dominates (For Now)
The U.S. dollar isn’t just a currency it’s the global benchmark.
- 88% of global FX transactions involve the dollar
- Most commodities oil, gold, even cocoa are priced in USD
- Dollar-denominated debt dominates trade and lending
But trust in the dollar is eroding:
- Weaponization of the USD through sanctions
- Record U.S. debt and rising deficits
- Loss of purchasing power from inflation
BRICS: The Challenger Emerges
The BRICS bloc now controls:
- Over 40% of the world’s population
- Around 30% of global GDP (PPP-adjusted)
- The world’s largest energy exporters (Russia, Saudi Arabia, Iran) and importers (India, China)
The Pitch:
- A common currency to bypass SWIFT, dollar settlement, and sanctions
- Possibly backed by gold, oil, or a basket of BRICS currencies
What This Means for Traders
- U.S. Dollar Volatility
- De-dollarization = long-term pressure on USD
- Short-term: increased demand for safe-haven assets
- Gold, Oil, and Commodities
- A commodity-backed BRICS currency could spike demand for:
- Gold
- Crude
- Agricultural exports
- Emerging Market FX Trades
- Expect higher volatility and liquidity in:
- CNY (Chinese yuan)
- RUB (Russian ruble)
- BRL, INR, ZAR
- Watch currency swaps, BRICS bond offerings, and digital payment rails
Why the BRICS Currency Faces Huge Obstacles
Despite the headlines, a single BRICS currency faces major challenges:
- No unified central bank
- Massive economic disparities among BRICS members
- China’s capital controls
The euro took decades to build BRICS hasn’t even agreed on a name.
Juggernut Insight:
The BRICS currency might not kill the dollar but it could wound it badly over time.
Traders should watch:
- Gold price moves
- Oil pricing in non-USD
- Trade deals outside the SWIFT system
- Fed’s response to a declining global role
Because the real currency war may not be fought on charts it’ll be fought in trade agreements, energy pricing, and digital infrastructure.