Brics hammer: Gold-based currency is supposed to replace US dollars

Brics hammer: Gold-based currency is supposed to replace US dollars

Brics plans gold-covered currency: the end of the US dollar dominance?

The Brics Alliance, consisting of nine members, has made clear progress in her project in the past two years to dethroned the US dollar. The efforts of the block to introduce a new currency covered by gold were caused a sensation internationally and might pave the way for a fundamental change in the global financial system.

Why is this development so significant?

A gold -covered currency of Brics could serve as a cornerstone for future financial developments and lead the alliance to a new era. In view of the alliance's recent gold acquisitions, some financial experts see the “beginning of the end” for the US dollar. This is supported by the rise of the gold price, which achieved a new high of $ 2,480 per ounce on July 17th.

The increase in the gold price

Vahan Roth, analyst at Intelligence Consultancy GIS, attributed the price increase to current geopolitical turbulence. "There are two active wars - in Ukraine and the Middle East - and both could expand to a wider international conflict at any time," he said. In addition, decisive elections will take place this year that could influence the global political and economic structure. All of this increases the uncertainty and thus also the attractiveness of gold as a secure system.

The role of world gold councils

The World Gold Council recently reported that Brics has been the largest gold buyer since 2022. The massive accumulation of the precious metal by Allianz indicates its long -term intentions of promoting a multipolar world order and gaining financial independence from western -dominated currency structures. The founders of the Allianz have already expressed the idea of a gold -covered currency that could support these goals.

effects on emerging markets

An important point is also how this development could affect emerging countries. Countries that were previously heavily dependent on the US dollar could begin to distance themselves from him and to take over the new Brics currency for cross-border transactions. This could not only strengthen the position of Brics, but also support other emerging economies, which would then be less affected by fluctuating dollar changes.

a global paradigm shift?

The idea that a loose alliance like Brics+ with its 3.5 billion people - around 45 percent of the world population - and a third of the global land area could establish such a strong currency is impressive. Even if the realistic prospects of such a currency and their potential effects are still being discussed, the advance is significant and could initiate a paradigm shift in the global financial system.

The global community is eagerly watching the further developments of the Brics Alliance, especially at the coming summit in October. Updates to the new currency and extensions of membership are expected to be presented there. It remains to be seen how the traditional dominance of the US dollar will be challenged in the future.

- Nag