A former economic advisor to the White House asserts that a forthcoming BRICS-issued currency has the potential to dethrone the U.S. dollar as the dominant currency in international trade.
Joseph Sullivan writes in a new article for Foreign Policy that a BRICS-issued currency would allow its members – Brazil, Russia, China, India, and South Africa – to abandon the dollar and trade products and services using the new currency, which he refers to as “the bric.”
According to Sullivan, who served in the Trump administration, the bric could supplant the “dollar’s place on the throne” because BRICS is comprised of regional economic powerhouses. The economist continues by stating that the bric could mark the commencement of the dollar’s decline.
“Is it possible to foresee the BRICS relying only on them together as a trading currency? Yes. To begin with, they could cover all of their import costs independently. Trade surpluses (sometimes called the balance of payments surpluses) totaled $387 billion for the BRICS in 2022, with the bulk of that surplus coming from China.
It’s possible that the BRICS might become economically independent from the rest of the globe for the first time.”
Regarding the US government’s reliance on the dollar to keep other nations in line, Sullivan argues that the reaction of other nations to the financial sanctions imposed on Russia indicates that the weaponization of the USD will become less effective over time.
Sullivan thinks the bric might eventually replace the dollar, but he also thinks it will take some time. There’s no way the dollar’s supremacy would suddenly collapse, but a bric might start chipping away at it.
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