In a significant development, BRICS, a bloc comprising Brazil, Russia, India, China, and South Africa, has expanded its reach by including Saudi Arabia, the United Arab Emirates (UAE), Argentina, and Iran as its new member states. With a total of 11 member nations, BRICS is charting a course to challenge the long-standing dominance of the US dollar in the global financial system. While it remains uncertain whether the alliance will amend its name to incorporate these new members, what is evident is their determination to reduce dependence on the US dollar, which has held sway over international trade for decades.

One of the central grievances shared by BRICS, like many nations worldwide, is the alleged weaponization of the US dollar. A staggering 60 percent of international reserves are held in dollar-denominated assets, making the dollar the most prevalent currency in global trade, accounting for 90 percent of all currency market transactions. Whenever the United States imposes financial sanctions on a country, that nation is effectively shut out of the international financial system, severely constricting its ability to engage in international trade and consequently crippling its domestic economy.

Several BRICS members, including Brazil, China, and more recently, Russia, have found themselves subjected to such sanctions, prompting them to seek alternative currencies for trade. Among the top contenders for BRICS nations looking to diversify is the Chinese Yuan, a currency supported by gold reserves, or even Bitcoin (BTC).

In addition to accusations of dollar weaponization, the US government has been criticized for pursuing loose monetary policies that have repercussions not only for its own economy but also for the global economy. This was starkly illustrated during the 2020 pandemic lockdown when the US government printed trillions of dollars to stimulate its economy. In 2020 alone, over $3 trillion was printed, and this trend continued into 2021. The printing of excess money devalues the currency, and in the case of the US dollar, the ripple effects are felt worldwide. India, among others, has gone so far as to label the United States an ‘irresponsible’ issuer of the world’s reserve currencies.

Another critical factor that bolstered the US dollar’s global dominance is its role in the Middle East oil trade. Established in 1945, a historic deal between Saudi Arabia and the United States stipulated that Saudi Arabia would exclusively sell its oil to America using the US dollar, a practice that soon became the global norm.

The inclusion of new member states in BRICS, particularly Saudi Arabia, the UAE, Argentina, and Iran, all major oil-producing nations, has significant implications for this prevailing practice. Saudi Arabia has indicated its openness to exploring alternative currencies for oil trade, with India already making strides by purchasing oil from Saudi Arabia in its local currency.

It’s crucial to recognize that while the US dollar has faced challenges over the years, it is now confronting a formidable force in the form of a common currency, which could potentially be the well-established and successful Bitcoin (BTC).

Bitcoin’s decentralized nature renders it resistant to manipulation and unlikely to be weaponized for political purposes. Moreover, it serves as a hedge against inflation, as its supply is fixed, preventing arbitrary printing like that seen with the US dollar. Finally, Bitcoin has gained global recognition, allowing it to be used for international transactions and payments, with recipients easily converting it into their local currencies for domestic use.

In conclusion, BRICS and its new allies are actively working to reduce their reliance on the US dollar in a bid to promote financial stability and protect their economies from potential weaponization of the dollar. With the inclusion of major oil-producing nations, the landscape of global trade may be on the brink of a significant transformation. Whether Bitcoin or other alternative currencies will play a pivotal role in this shift remains to be seen, but the drive for diversification is undeniable, and its implications for the global financial system are profound.