The United States dollar has been the world’s dominant currency for decades, acting as the default currency for international trade. However, BRICS nations, which include Brazil, Russia, India, China, and South Africa, are looking to change this by “de-dollarizing” their economies. This shift away from the US dollar has the potential to significantly impact the global financial landscape.

Dr. Zongyuan Zoe Liu, a fellow for the Council on Foreign Relations and the author of “Sovereign Funds: How the Communist Party of China Finances its Global Ambitions,” discusses the motives behind this effort. According to Liu, the BRICS nations are seeking to reduce their dependence on the US dollar due to concerns about the stability of the US economy and the impact of US economic sanctions on their countries. The de-dollarization effort is also seen as a way for these nations to gain greater control over their own economies and reduce their vulnerability to external financial shocks.

The BRICS nations have taken several steps towards de-dollarization. One example is the establishment of the BRICS New Development Bank in 2014, which provides funding for infrastructure projects in member countries without relying on the US dollar. Additionally, China and Russia have been pushing for increased use of their own currencies in international trade, with the yuan and the ruble being used more frequently in transactions with countries like Iran and Venezuela that are facing US sanctions.