BRICS Update: $7 Billion Crypto Swap Deal between China & Saudi Arabia

• BRICS Nations China and Saudi Arabia Initiate Steps towards De-dollarization
• Saudi Arabia's Symbolic Step Away from the US Dollar
• China Advances its De-dollarization Initiative
• Limiting US Dollar Usage: The Currency Swap Deal Between China and Saudi Arabia
• Impact on the US Dollar and Oil Trade

BRICS Nations China and Saudi Arabia Initiate Steps towards De-dollarization

BRICS members China and Saudi Arabia have embarked on de-dollarization endeavors, eliminating the US dollar from cross-border transactions. The two nations have officially executed a $7 billion currency swap deal, which prioritizes their local currencies, the yuan and the riyal. The agreement, valid for three years, allows for trade to be settled in local currency, subject to a limit of 50 billion yuan or 26 billion riyals. Consequently, the US dollar will not factor into trade for up to $7 billion between these two BRICS members.

Saudi Arabia's Symbolic Step Away from the US Dollar

This trade agreement is more representative than concrete, symbolizing Saudi Arabia's willingness to distance itself from the US dollar. China is leading a mission to persuade other nations to conduct trade in local currencies and curtail dependence on the US dollar. The Xi Jinping-led administration is focused on globalizing the Chinese Yuan in a bid to challenge the status of the US dollar as the universal reserve currency. The $7 billion currency swap deal with Saudi Arabia represents a significant achievement in the de-dollarization initiative.

China Advances its De-dollarization Initiative

In addition to this, China has already entered into a currency swap agreement with new BRICS member Argentina earlier this year. This positions China at the forefront of the de-dollarization initiative, as it continues to strive towards its vision of a dollar-free world.

Limiting US Dollar Usage: The Currency Swap Deal Between China and Saudi Arabia

The new BRICS member, Saudi Arabia, holds the position of the world's largest oil exporter. If China and Saudi Arabia utilize this agreement to settle oil trade, other developing nations might emulate them. The potential impact on various sectors in the US, in case BRICS ceases using the dollar, can be learned more about here.

Impact on the US Dollar and Oil Trade

The US dollar presently serves as the default currency for oil trade. However, BRICS members are now keen on altering the modus operandi of oil trade settlement. This move would empower the economies of developing nations, and their local currencies would see a surge in market value. To summarize, the US dollar may face increased challenges in the future from BRICS and other emerging economies.

Edited by Jonathan Stoker