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Should the BRICS nations establish a new reserve currency, it would likely significantly impact the US dollar, potentially leading to a decline in demand, or what's known Amid the BRICS’ impending creation of its own stablecoin, the US is reportedly coming after the digital asset in an effort to save the dollar. Specifically, the Lummis In this article, I’ll expand on that initial answer and unpack whether BRICS can mount a meaningful challenge to the almighty American dollar. Understanding BRICS. To A group of emerging countries are planning a payments platform to bypass the US dollar, Lavrov announced. The initiative follows a BRICS summit call for trade in Brazil's President called on Wednesday for the BRICS nations to create a common currency for trade and investment between each other, as a means of reducing their BRICS, which now includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates, has a well-documented strategy of de-dollarization that aligns with Given the recent expansion of the “BRICs” countries to include five new members, will the US dollar remain the world’s reserve currency? Franklin Templeton

BRICS vs. the Dollar: Is the US Coming After Digital Assets to Save its Currency?

The global financial landscape is shifting, and one of the biggest questions on everyone's minds is: Will the BRICS nations challenge the dominance of the US dollar? Amid the BRICS’ impending creation of its own stablecoin, the US is reportedly coming after the digital asset in an effort to save the dollar. Specifically, the Lummis-Gillibrand Responsible Financial Innovation Act, while aiming to regulate the crypto space, is also seen by some as a move to secure the dollar's position in the digital economy.

Understanding the BRICS Challenge to the Dollar

BRICS, which now includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates, has a well-documented strategy of de-dollarization that aligns with their desire for greater economic independence. This strategy is multifaceted and includes:

  • Trade in Local Currencies: A group of emerging countries are planning a payments platform to bypass the US dollar, Lavrov announced. The initiative follows a BRICS summit call for trade in local currencies to reduce reliance on the dollar.
  • Common Currency Proposals: Brazil's President called on Wednesday for the BRICS nations to create a common currency for trade and investment between each other, as a means of reducing their dependence on the US dollar.
  • Digital Assets and Stablecoins: The potential launch of a BRICS stablecoin is seen as a direct challenge to the dollar's dominance in international trade and finance.

Will BRICS Succeed in De-dollarization?

In this article, I’ll expand on that initial answer and unpack whether BRICS can mount a meaningful challenge to the almighty American dollar. Understanding BRICS. To assess the potential impact, consider this: Should the BRICS nations establish a new reserve currency, it would likely significantly impact the US dollar, potentially leading to a decline in demand, or what's known as de-dollarization. This could weaken the dollar's purchasing power and potentially impact US economic stability.

The Future of the Dollar as the World's Reserve Currency

Given the recent expansion of the “BRICs” countries to include five new members, will the US dollar remain the world’s reserve currency? Franklin Templeton analysts are closely watching these developments. The rise of alternative currencies and payment systems, particularly those based on digital assets, presents a real challenge. The US response, including regulatory initiatives like the Lummis-Gillibrand Act, will be crucial in determining the future of the dollar in the global financial system. The question isn't just about saving the dollar; it's about adapting to a changing world where the US faces increasing competition from nations seeking greater financial autonomy.

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