BRICS vs USD: 3 Strategies Redefining Global Finance in 2024

• The BRICS Alliance's Plans to Dethrone the US Dollar by 2024
• Three Strategies the BRICS Bloc is Using to Dethrone the US Dollar
• 1. Declining US Reserves held by Central Banks
• 2. Global Trade and Energy Production
• 3. Rising US Debt and Increasing Local Currency Usage

The BRICS Alliance's Plans to Dethrone the US Dollar by 2024

The BRICS alliance has been persistent in its quest to shake the domination of the US dollar in global financing throughout 2023. With strategic plans in place, the bloc is further poised to decrease the global usage of the Greenback in 2024. Despite the dominance of the US Dollar as a global reserve asset, the BRICS bloc, with its impressive GDP (PPP), is steadily climbing the ladder. This ascent is further fueled by the bloc's recent expansion efforts, strengthening its de-dollarization strategies.

Three Strategies the BRICS Bloc is Using to Dethrone the US Dollar

1. Declining US Reserves held by Central Banks

The competition facing the US Dollar is mounting, with an evident decline in the amount held by central banks. This is part of a longstanding trend, where over the past two decades, foreign reserves of the dollar held by central banks fell from over 70% to less than 60%. A crucial factor is the global central banks' intent to diversify their economic presence, thus reducing their reliance on the dollar.

2. Global Trade and Energy Production

The 2023 expansion of the BRICS alliance marked a significant shift in global power balance. With the inclusion of the United Arab Emirates (UAE), Saudi Arabia, Egypt, Ethiopia, and Iran, a new leader in energy production and global trade emerged. This expanded bloc boasts countries involved in oil trade far beyond other collectives. Notably, the BRICS bloc is conducting their trades outside of the dollar, enhancing the value of their currencies, while the opposite effect is being felt on the US currency. This presents a crucial battlefront in the BRICS plan to continue undermining the US dollar in 2024.

3. Rising US Debt and Increasing Local Currency Usage

The BRICS alliance's challenge against the US Dollar is intrinsically linked with the unsettling rise in US debt, currently surpassing $33 trillion and exceeding the country's annual output by over 120%. These worrying developments have spurred global focus on diversification to counterbalance inflationary shocks and increasing debt default concerns.

Moreover, BRICS is striving to enhance the usage of their local currencies. Intriguingly, the alliance has hinted at the development of a BRICS currency that could be launched as early as this year. Should this materialize, and the bloc fully embraces its usage, the US dollar would face a formidable challenger. The BRICS alliance, a dominant trading bloc, could dramatically alter global economic developments with the implementation of their currency.

Edited by Jonathan Stoker