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Many countries are interested in joining the BRICS alliance and accepting the new currency. The BRICS could soon become BRICS+ as South African Ambassador Anil Sukrall suggested the alliance could expand this year. A decision to allow more countries to join the bloc could be taken at the next summit in South Africa in August. According to Bloomberg, Skrull confirmed that more than a dozen countries have applied to join the BRICS, both formally and informally.
The alliance will be even stronger after expansion, as the GDPs of both countries exceed those of the United States and other Western countries. This could lead to a lag for the dollar and euro as developing countries may end their reliance on the US dollar. The BRICS countries are, therefore, better positioned than ever to introduce the new global financial order.
The latest report indicates that 25 countries have joined the BRICS and are ready to accept the new currency in international trade. Countries expressing interest in joining the BRICS alliance include Afghanistan, Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Saudi Arabia, Senegal, Sudan, and Syria, which includes the United Arab Emirates, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe.
BRICS includes five countries: Brazil, Russia, India, China and South Africa. Therefore, a total of 30 countries are currently involved in stripping the US dollar from its status as a global reserve.
If any of these countries abandon the dollar and start cross-border trade in new currencies, the dollar could suffer. The dollar could depreciate globally and find no way to cover the deficit. The soon-to-be-issued BRICS currency could have the power to end international dollar dominance.
Other news reports say a handful of countries worldwide are buying large amounts of gold to end their reliance on the US dollar. Several countries are working together to find new ways to process transactions without paying in US dollars. Saudi Arabia and China directly negotiate whether to process cross-border payments in their currencies. China has persuaded many countries to use the Chinese yuan instead of the US dollar.
Countries interested in joining BRICS are also oil-rich countries. The alliance could therefore force European countries to pay for their oil in the new currency instead of dollars. Read more about how many sectors in the US could be affected by this development.
In addition, developing countries diversify their reserves not only in US dollars and other foreign currencies but also in gold. However, gold accumulation has risen sharply since 2022, and most central banks have welcomed the move. Central banks in India, China, Russia, Brazil and others are hoarding gold.
The World Gold Council reported China bought 102 tonnes of gold, and Russia bought 31.1 tonnes. In 2023 alone, India increased its gold reserves by 2.8 tonnes. India has been accumulating gold for months and could add more by the end of the year. Therefore, when the BRICS countries introduce their new currencies in August, their foreign exchange reserves will likely be backed by gold.
