Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Iran MFA: Iran has not received any written proposal from the US on the nuclear deal, whether directly or indirectly.
Al Mayadeen correspondent in Yemen: Israeli aggression targets the port of As-Salif, Hodeidah governorate.
Reuters: The Russian and Ukrainian delegations met in Istanbul
Al Mayadeen's correspondent: 72 martyrs in Israeli raids on the Gaza Strip since dawn today
Al Mayadeen's correspondent: Iran maintains that its talks with the Europeans and its indirect negotiations with the United States are proceeding on separate tracks
Al Mayadeen's correspondent in Istanbul: Talks with the European Troika are being led by Iran's deputy foreign ministers for political and legal affairs
Al Mayadeen's correspondent: Bombardment of the Gaza Strip by land, sea, and air has continued since the early morning
Al Mayadeen's correspondent in Istanbul: Talks kick off between Iran and the European Troika in Istanbul
Local Syrian sources: The village of Al-Thala in the western countryside of Sweida was subjected to mortar shelling, with explosions heard in the area.
Occupied Palestine: Very violent Israeli raids target Tal al-Zaatar in Jabalia, north of the Gaza Strip.

BRICS' push to reduce US dollar dominance with digital currencies

  • By Al Mayadeen English
  • Source: Business Insider
  • 28 May 2024 17:44
  • 5 Shares
3 Min Read

The practicality of establishing a common currency is challenging; instead, the BRICS organization has focused on increasing trade and lending in local currencies to diminish reliance on the dollar, writer Huileng Tan says.

Listen
  • x
  • A woman pays with cash as she buys from a street vendor, Sept. 26, 2017 in New York. Despite numbers showing a healthy economy overall, lower-income spenders are showing the strain. (AP)
    A woman pays with cash as she buys from a street vendor, Sept. 26, 2017 in New York. Despite numbers showing a healthy economy overall, lower-income spenders are showing the strain (AP)

An op-ed published on Business Insider by writer Huileng Tan delves into efforts led by the BRICS group in advocating for a move away from US dollar dominance.

Last year, Brazilian President Luiz Inácio Lula da Silva proposed a common BRICS currency, though this idea faced skepticism from economists.

The practicality of establishing a common currency is challenging; instead, the bloc has focused on increasing trade and lending in local currencies to diminish reliance on the dollar.

Christopher Granville, managing director of global political research at GlobalData TS Lombard, suggested that discussions on reducing dollar dependence might gain momentum during the BRICS summit in Kazan, Russia, scheduled for October 22-24.

This comes amid rising tensions between the US and China, and secondary sanctions by Washington on banks processing payments involving Russia, even in local currencies like the Chinese yuan.

A significant development in this context is the interest of central banks in digital-currency transfers. Granville noted that a potential systemic solution involves a platform from the Bank for International Settlements (BIS) that facilitates direct, peer-to-peer settlements of commercial invoices and foreign-exchange trades using central-bank digital currencies (CBDCs).

These currencies are akin to cryptocurrencies but are issued and backed by central banks. In 2022, central banks from China, Hong Kong, the UAE, and Thailand participated in a BIS trial of this system, although it is not yet operational.

Read more: US dollar shares shrink in global reserves amid de-dollarization trend

Related News

About 24% of BRICS investment transactions made in national currencies

BRICS FMs condemn unilateral protectionism, call for UN reforms

Russian Foreign Minister Sergey Lavrov has promoted a digital-currency-based settlement system, which Granville interprets as an indication that central banks are considering a "US-insulated" solution.

This solution seems particularly relevant for China amidst its trade conflict with the US, as China already has a well-developed digital currency, the digital yuan, used domestically for various payments.

However, the BIS suspended the Russian central bank's membership following Russia's launch of its special military operation in Ukraine in 2022, creating uncertainty about how Russia would participate in the digital-currency platform.

Despite this, Granville argues that the involvement of other central banks in a CBDC system could challenge the US dollar's dominance in international payments.

The US dollar accounted for 60% of international payments outside the eurozone in 2023, down from its 80% share in trade finance and 60% in global foreign-exchange reserves.

Read more: Russia, China reach near complete de-dollarization in bilateral trade

Another recent report by Business Insider detailed that while the West cannot fully isolate Russian banks from the SWIFT messaging network due to the adverse impact on trade finance, reducing the US dollar's share in international payments through a non-dollar CBDC platform could undermine one of the pillars of the dollar's global reserve currency status.

This shift could weaken the dollar's role in cross-border payments, even though trade finance and FX reserves remain more critical.

Despite the potential benefits, implementing central-bank digital currencies faces challenges. Even China, with one of the most advanced digital currencies, employs a "two-tier" system where banks act as wallet-holding agents to prevent disruption to the financial sector and maintain stability. 

  • BRICS
  • Russia
  • Dollar
  • Sanctions on Russia
  • China
  • de-dollarization

Most Read

A boy draped in a Palestinian flag carries a mock rocket during a weekly anti-US and anti-Israeli rally in Sanaa, Yemen, Friday, May 9, 2025 (AP)

Yemen announces hypersonic missile strike on Ben Gurion Airport

  • Politics
  • 9 May 2025
Two F-35 jets arrive at it's new operational base Wednesday, Sept. 2, 2015, at Hill Air Force Base, in northern Utah. (AP)

F-35 near-misses over Yemen signal new risks for 'Israel': Forbes

  • Politics
  • 14 May 2025
Palestinians pray over bodies of people killed in the Israeli bombardment who were brought from the Shifa hospital before burying them in a mass grave in the town of Khan Younis, southern Gaza Strip, Wednesday, Nov. 22, 2023. (AP )

Gaza casualty figures mask a much bigger horror, new study shows

  • Politics
  • 11 May 2025
Gaza and the logic of necropolitics: Sovereignty measured by killing

Gaza and the logic of necropolitics: Sovereignty measured by killing

  • Politics
  • 15 May 2025

Coverage

All
Gaza prevails against genocide

Read Next

All
Romanian presidential front-runner accuses Macron of interference
Europe

Romanian presidential front-runner accuses Macron of interference

Syria signs $800 million deal with UAE to develop Tartus Port
MENA

Syria signs $800 million deal with UAE to develop Tartus Port

Some Pakistanis have taken to the streets in protest over India's decision to suspend the water deal. (AP Photo: Anjum Naveed)
Politics

India threatens Pakistan’s water supply with Indus river project plans

Former FBI chief accused of calling for Trump’s assassination
US & Canada

Former FBI chief accused of calling for Trump’s assassination

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS