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Excerpts from:
What Happens to the U.S. Dollar if BRICS Launch New Currency?
May 28, 2023
If the new BRICS currency were to gain significant traction and acceptance among countries, it could contest the U.S. dollar’s status as the primary reserve currency.
The new BRICS currency could lead to a gradual shift in global currency reserves away from the U.S. dollar. The development could potentially reduce the demand for U.S. dollars and weaken its position in international markets.
A decrease in demand for the dollar leads to the depreciation of the currency, as it loses supply and demand dynamics.
However, the U.S. dollar’s status as the world’s reserve currency is based on a variety of factors. The factors include the size and stability of the U.S. economy and the trust and confidence placed in the currency. Any significant impact on the U.S. dollar’s status would require a substantial shift in global economic and geopolitical dynamics.
Additionally, launching a new currency involves numerous challenges and complexities, including coordination among the BRICS countries. The new tender needs to build credibility and confidence in the global markets.
The BRICS alliance needs to create the necessary infrastructure and institutions to support its use on a global scale. These factors would play a crucial role in determining the success of the new BRICS currency in the financial system.
In conclusion, the U.S. dollar could remain a dominant force as the soon-to-be-released BRICS currency is yet to prove its mettle.
https://watcher.guru/news/what-happens-to-us-dollar-if-brics-currency-launch
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