BRICS Takes on the Dollar: The Rise of Gold-Backed Currencies
With recent bank failures and global economic uncertainty, the U.S. dollar seems really unstable and its future is more uncertain than ever.
In 2023, the U.S. dollar faces competition from multiple sources, including gold, which the new BRICS currency may soon support. Gold has experienced a steady 20% increase in value since last year and is considered a reliable hedge against inflation.
Notably, the demand for gold in 2023 is not driven by individual or institutional investors but by the central banks of BRICS countries.
As per the World Gold Council, Russia, China, and India’s central banks have been the primary buyers of gold in 2023. The dollar’s value has decreased due to accumulating debt, leading many countries to avoid falling into a debt trap.
In Q1 2023, China purchased 102 tonnes of gold, Russia acquired 31.1 tonnes, and India added 2.8 tonnes to its reserves. BRICS nations plan to support their currencies with gold instead of the dollar, signaling a decline in the latter’s dominance in global trade.
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The upcoming BRICS summit in South Africa may be a game-changer. Reports suggest that gold could be used as a benchmark for the new currency, weakening the dollar’s strength in the market. This development presents a significant advantage for BRICS countries to introduce a gold-backed currency.
In conclusion, a time when countries keep gold reserves instead of the U.S. dollar is not too far away. The next BRICS summit may be crucial in determining the dollar’s future in the years to come.
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.
