BRICS, ASEAN, and the Dollar’s Debt Dilemma: Shifting Currency Tides
BRICS and ASEAN alliances are shifting away from the US dollar in global trade, opting for local currencies in cross-border transactions.
A total of 21 nations have formally agreed to reduce dependence on the US dollar to bolster their own currencies.
Both BRICS and ASEAN seek to challenge the US dollar’s global reserve status by prioritizing local currencies. This move, however, appears less threatening than the mounting debt crisis within the US.
The dominance of the US dollar faces a challenge, not from external factors but from within. Recent data from the Congressional Budget Office (CBO) suggests that the US dollar deficit could reach 181% of the American GDP over the next three decades.
Excessive debt played a role in the decline of the Pound sterling as a global currency in the 1900s. In contrast, Bloomberg’s 30-year prediction for BRICS is striking.
The 11-member BRICS bloc could control 50% of the world’s GDP by 2050, up from their current share of 30% of global trade, much of which could soon be settled in local currencies.
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Moreover, BRICS represents 46% of the global population, a number that continues to grow while Western populations decline. Additionally, BRICS now commands 42% of the world’s oil supply, thanks to the inclusion of Saudi Arabia and the UAE.
If the US can manage its dollar debt, its economy, and GDP could thrive in the coming decades, facing minimal competition from BRICS if the US dollar deficit is brought under control. In conclusion, the escalating debt crisis within the US may threaten the US dollar’s stability more than the BRICS alliance.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
