BRICS Gold-Backed Currency: Why Analysts Predict Failure

Is a BRICS gold-backed currency a viable threat to the US dollar? Investment strategist Lyn Alden doesn't think so. Amidst rampant discussion of a BRICS currency, Alden and other market analysts are sharing their reasons for skepticism, predicting the initiative will ultimately fail to dethrone the U.S. dollar.

The Dream vs. The Reality: Challenges Facing a BRICS Currency

Despite growing media hype surrounding a BRICS currency led by Brazil, Russia, India, China, and South Africa, the reality is far more complex. World One News Page highlighted on Wednesday that a BRICS currency isn’t realistic in the near term due to persistent economic imbalances and U.S. dollar dependency among member nations.

Economic Imbalances and Lack of Synchronized Policy

Creating a BRICS currency backed by gold makes no sense, according to David Woo, a former top Bank of America strategist. One of the biggest hurdles is the lack of synchronized monetary policy among member states. As experts say, a gold-backed BRICS common currency is unlikely in the short term, as it would require precisely that – a harmonized approach to monetary policy, something difficult to achieve given the diverse economic landscapes of Brazil, Russia, India, China, and South Africa. Furthermore, such a currency would require a level of trust and cooperation that is currently lacking.

The China Factor and Gold Accumulation

China's role is pivotal. The World Gold Council reported that China is the largest buyer of the precious metal, followed by Russia and India. This massive accumulation of gold has fueled speculation about the BRICS nations' intentions. However, simply accumulating gold doesn't guarantee the success of a new currency. As analysts point out, the underlying economic fundamentals and political will are crucial factors. 13 de sept. de 2025. The question remains: what would be achieved by creating such a complex system?

Why the US Dollar Remains Dominant (For Now)

Ultimately, the dominance of the US dollar is deeply entrenched in the global financial system. Overcoming this requires more than just a gold backing; it demands a unified economic vision and a willingness to overcome internal challenges. While the discussion around a BRICS currency will likely continue, the consensus among many analysts is that its failure is more probable than its success, at least in the foreseeable future.