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BRICS? No way! Major newspaper points out that the main threat to the US dollar is not the bloc
The hegemony of the dollar as the global reserve currency has been the subject of questioning over the past few decades. While the BRICS bloc (formed by Brazil, Russia, India, China and South Africa, now expanded with new members) is often singled out as one of the dollar's main rivals, a recent Bloomberg report suggests that the biggest danger to the currency lies not in external alliances, but within the country itself. U.S.
The BRICS strategy and 'de-dollarization''
The agenda of the BRICS aims to create alternatives to dependence on the dollar in international trade. Recently, members of the group have expressed interest in conducting transactions using their own national currencies, reducing the influence of the dollar on their economies.
An example is the China, which seeks to consolidate the yuan as an international currency. The country promotes bilateral agreements and encourages the adoption of the yuan in global trade.
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However, despite these movements, the dollar's influence remains dominant. Currently, around 58% of global foreign exchange reserves are denominated in dollars, making any attempt at de-dollarization a monumental challenge.
Furthermore, the complexity of international trade is a major obstacle to replacing the dollar.
For example, India may want to import more oil from Russia, but if there is no counterpart in Indian goods to export to the Russian market, exchanging it in rupees or rubles becomes unfeasible. This creates a cycle of accumulation of national currencies with no practical use.
Sanctions and the role of the US in the de-dollarization process
US sanctions on several countries are also driving the search for alternatives to the dollar. Countries such as Russia, Iran and Belarus, which are often the target of unilateral sanctions, are looking for ways to conduct transactions outside the US-dominated financial system.
The need for these countries to create independent mechanisms intensifies as financial blockades hamper trade relations.
In this scenario, even countries allied with the United States are beginning to consider diversification. Institutions such as the Bank for International Settlements (BIS), controlled by Western central banks, explored projects for transferring value without using the dollar, although many were halted due to political pressure.
The real danger: the United States itself?
According to Bloomberg, it is not the BRICS that poses the greatest threat to the dollar, but American policies themselves. The report highlights that the dollar's strength is linked to the reliability of the United States, not threats or brute force.
The American economy holds an exorbitant privilege in controlling global foreign exchange reserves, but this privilege depends on confidence in the country's political and financial stability. However, foreign and domestic policy overreach threatens to erode this trust.
Among the factors mentioned are:
- Sanctions: Measures applied unilaterally against several countries, which fuel the search for alternatives to the dollarized system.
- Commercial rates: Protectionist decisions, such as increasing tariffs, which can destabilize global trade.
- Geopolitical conflicts: Confrontational attitudes that undermine the image of the United States as a reliable partner.
The document points out that thoughtless policies, such as the threats made by Donald Trump to prevent the advancement of BRICS, are counterproductive.
Rather than strengthening the dollar, these actions only encourage other nations to create pathways to escape US influence.
Practical example: the impact of sanctions on India
A clear example of the impact of US sanctions is the case of India. The country was forced to stop importing oil from Venezuela and, later, Iran, due to restrictions imposed by the US.
As a result, India had to seek alternatives to meet its energy needs, facing difficulties in managing relations commercials with other partners such as Russia. This scenario reinforces the call for a system less dependent on the dollar.
Global dependence on the dollar still prevails
Although de-dollarization efforts are underway, the dollar’s dominance remains intact. The power of the US currency lies not only in its universal acceptance, but also in the trust placed in the economic and political stability of the US.
However, this confidence has its limits. Measures such as excessive sanctions, unilateral tariffs and internal political instability are warning signs.
If the US fails to balance its policies and strengthen its credibility, the impact on the dollar could be irreversible. This internal fragility is, according to experts, the biggest risk to the currency's primacy.
Therefore, the biggest threat to the US dollar is not alliances like BRICS, but the decisions made by the United States itself.
