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The BRICS countries are planning to dump the US dollar for trade settlements, opening the way for cryptocurrency adoption
The BRICS nations are reportedly considering a shift away from the US Dollar as the primary currency for trade settlements. This potential move could potentially pave the way for increased use of cryptocurrencies.
BRICS will be moving away from US Dollar trade settlements, in line with its vision.
BRICS added six new countries today, including Saudi Arabia, UAE and Iran, which could affect oil trade, consequently impacting USD.
While no alternative currency has been announced, the de-dollarisation would allow crypto tokens such as Bitcoin and stablecoins to take over.
The United States Dollar (USD) has been losing power in global markets as a result of deteriorating foreign ties with countries such as the BRICS. One of the most important decisions appears to be coming from the Eastern hemisphere, which may have a long-term unfavorable influence on USD but may pave the way for a brighter future for cryptocurrencies.
BRICS abandons the USD, Crypto could swoop in
The BRICS group, which includes six of the world's largest rising countries - Brazil, Russia, India, China, and South Africa - is trying to phase out the usage of the US dollar for trade transactions entirely. Russian President Vladimir Putin stated the same publicly earlier this week, even calling for a new currency to conduct commerce in.
Following that, the EU announced the addition of six new countries from among the dozens of applications it had lately received. Iran, Argentina, the United Arab Emirates (UAE), Egypt, Saudi Arabia, and Ethiopia have all joined BRICS. These countries will join the group beginning in 2024.
It should be emphasized that three of the six new countries, Saudi Arabia, the United Arab Emirates, and Iran, are among the world's largest oil exporters. For the longest period, the United States has had oil trade links with these countries, and the majority of it is settled in USD.
However, when more nations join BRICS and if the decision to ditch the USD for trade is approved, oil trades will be handled in a different currency. This could have a negative influence on the value of the dollar while benefiting the alternative currency.
No substitute currency has been revealed as of yet, but the rising acceptance of cryptocurrencies leaves the door open for a digital asset to take its place. Aside from Bitcoin, blockchain-based currencies have proven to be rapid, efficient, and inexpensive, and they may be a viable successor for the US dollar.
However, a stablecoin such as Tether (USDT) or USD Coin (USDC) is more likely to be picked than other cryptocurrencies. This is due to the assets' consistent value as compared to cryptocurrency. Furthermore, stablecoins are unaffected by the volatility in the crypto and global markets, making them a viable option.
Nonetheless, if BRICS chose an alternative, it would most likely be a currency managed by the bloc. However, given the benefits of blockchain technology, the possibility of the same becoming a blockchain-based asset cannot be fully ruled out.
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