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BRICS is taking bold steps to reduce dependence on the US dollar and establish a multipolar financial system, as highlighted in the Kazan summit. Key initiatives BRICS, developing countries, and US allies have already begun decreasing the dollar for payment settlements. The US dollar is now used less than 60% of global trade while other currencies are TEHRAN (Tasnim) – BRICS and a handful of developing countries are reducing the US dollar intake in their respective Central Banks’ reserves. The US prints As the reliance on US dollars diminishes, central banks will begin dumping their dollar reserves. This will result in hyperinflation, a spike in interest rates to compensate Central bank holdings of dollar-denominated assets have been falling. Emerging market central banks have been at the forefront of this trend – understandably so – As the central banks of developing countries move away from the dollar in favor of gold and their local currencies, a new monetary order could be taking shape. For BRICS will abandon the dollar in three years. In 2025 the bloc expanded with the union of several countries such as Iran, Egypt, Ethiopia and the United Arab Emirates and The U.S. dollar still accounts for 59 percent of the world’s central bank reserves, down from 72 percent after World

BRICS & US Allies Ditching the Dollar: A Central Bank Shift?

Is the global financial landscape undergoing a dramatic transformation? Growing trends suggest BRICS nations and even some US allies are actively downsizing the dollar's role within their central banks. This shift, fueled by concerns over US monetary policy and the desire for a more multipolar financial system, is gaining momentum.

BRICS Taking the Lead in De-Dollarization

BRICS is taking bold steps to reduce dependence on the US dollar and establish a multipolar financial system, as highlighted in the Kazan summit. Key initiatives are underway to promote trade and investment in alternative currencies. The BRICS bloc, particularly after the 2025 expansion which included countries such as Iran, Egypt, Ethiopia and the United Arab Emirates, is actively exploring alternative payment systems and reserve currencies.

Reduced Dollar Intake in Central Bank Reserves

TEHRAN (Tasnim) – BRICS and a handful of developing countries are reducing the US dollar intake in their respective Central Banks’ reserves. Emerging market central banks have been at the forefront of this trend – understandably so – As the central banks of developing countries move away from the dollar in favor of gold and their local currencies, a new monetary order could be taking shape.

US Allies Also Diversifying

It's not just BRICS. Some US allies are also quietly diversifying their reserves, albeit at a slower pace. Concerns over the US national debt and potential sanctions have prompted a re-evaluation of dollar dominance.

The Impact on Global Trade and Finance

BRICS, developing countries, and US allies have already begun decreasing the dollar for payment settlements. The US dollar is now used less than 60% of global trade while other currencies are gaining traction. This trend could lead to increased volatility in currency markets and a shift in global economic power.

What's Driving the Change?

Several factors are driving this de-dollarization push. The U.S. dollar still accounts for 59 percent of the world’s central bank reserves, down from 72 percent after World War II, indicating a gradual but persistent decline. Concerns include:

  • US Monetary Policy: The US prints money frequently, leading to inflation concerns and a desire for more stable alternatives.
  • Geopolitical Risks: Sanctions and political tensions encourage countries to seek financial independence.
  • Desire for a Multipolar System: Many nations want a more balanced global financial system, less reliant on a single currency.

Potential Consequences: Inflation, Interest Rates, and a New Monetary Order?

As the reliance on US dollars diminishes, central banks will begin dumping their dollar reserves. This will result in hyperinflation, a spike in interest rates to compensate Central bank holdings of dollar-denominated assets have been falling.

The Future of the Dollar

While the dollar's dominance won't disappear overnight, the trend of de-dollarization is undeniable. Whether BRICS will abandon the dollar in three years remains to be seen, but the ongoing efforts to diversify reserves and promote alternative currencies signal a significant shift in the global financial landscape. The future will likely see a more multipolar system, with the dollar sharing the stage with other major currencies and potentially gold.

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