The upcoming 2024 BRICS summit in Kazan, Russia, will bring together the heads of state from the group’s ten current member nations, alongside other global leaders, including the Secretary-General of the United Nations.
Notably, Algeria has been welcomed as a new member of the New Development Bank, the BRICS bloc’s answer to Western financial institutions like the International Monetary Fund (IMF) and the World Bank.
This expansion comes amid growing frustration in the Global South over the perceived weaponization of the U.S. dollar.
Countries like Libya, Venezuela, and Russia have faced U.S.-led sanctions, which include the freezing of their dollar reserves and exclusion from the SWIFT international banking system.
Critics argue that these actions constitute collective punishment of entire populations, violating international law. In response, BRICS members are working to develop financial systems independent of U.S. control.
Russia and Iran have already created and linked their own financial messaging systems, bypassing SWIFT, and now handle more than 60% of their trade in local currencies.
This initiative is seen as a potential model for a broader BRICS financial network, allowing members and other interested countries to protect their economic sovereignty.
Over 60 nations have expressed interest in joining BRICS, which, if realized, could represent over 65% of the global population.
China, in particular, has made significant strides in reducing its reliance on the U.S. dollar. Since 2011, the percentage of international settlements in Chinese Renminbi has surged from 0.3% to 52.9%.
Other BRICS nations are similarly exploring alternatives to dollar-based trade, encouraged by China’s and Russia’s growing gold reserves and the use of central bank digital currencies.
The shift away from the U.S. dollar reflects diminishing confidence in its stability. Since the U.S. abandoned the gold standard in 1971, the dollar has become a fiat currency, reliant on global faith in its value.
However, as the U.S. national debt surpasses $35 trillion, rising interest rates on U.S. treasuries and mounting debt-servicing costs have placed increased pressure on the country’s financial system.
Some experts warn that the situation resembles a Ponzi scheme, with the U.S. forced to sell more treasuries to cover its liabilities.
As BRICS continues to strengthen its economic and financial ties, its push for a new global financial system may further accelerate the decline of the dollar’s dominance.
