BRICS, the economic alliance of Brazil, Russia, India, China, and South Africa, aims to launch a new currency backed by gold as a countermeasure to the US dollar. This potential common currency could herald a new financial era for the alliance, forming a cornerstone for further developments. The upcoming summit in 2024 is expected to clarify policies designed to challenge the dominance of the US dollar.
Reports indicate that BRICS is considering backing their new currency with gold rather than the US dollar or other local currencies. This strategy aims to return to the gold standard, promoting a multipolar world for all trade and transactions. The World Gold Council has noted that BRICS has been the largest buyer of gold since 2022, accumulating significant reserves of the precious metal.
Economist Thorsten Polleit commented on the impact of a new BRICS currency backed by gold, saying,
“A new international transaction unit, backed by gold, sounds like good money – and it could be, first and foremost, a major challenge to the US dollar’s hegemony.”
A gold-backed BRICS currency could significantly alter the financial landscape, potentially undermining the US dollar’s global dominance. Developing countries might start moving away from the US dollar, opting for the new currency for cross-border transactions.
This development could strengthen BRICS and other emerging economies, further marginalizing the US dollar.
Regarding the specifics of the BRICS gold-backed currency, the upcoming summit in October is anticipated to provide detailed information. Additionally, the 16th summit in the Kazan region of Russia is expected to be pivotal in answering key questions about this significant financial shift.
