The deal includes all BRICS countries as well as Thailand, Laos, Sri Lanka, Kazakhstan, Venezuela and Bolivia. Furthermore, it became one of the most far-reaching de-dollarization policies in the bloc’s history. Its presence should only be enhanced by the impending arrival of the bloc’s independent payments system.
The BRICS alliance introduces an agreement to eliminate the US dollar in international trade
Over the past two years, the BRICS economic alliance has developed dramatically. The group has sought to increase its relevance on a global scale and introduce an increasingly multipolar world. A large part of those efforts involved introducing landmark economic policies.
Now, the alliance has announced a groundbreaking development that could have huge ramifications for global finance. Specifically, BRICS announced a major trade agreement at this week’s Foreign Ministers’ Conference that will eliminate the US dollar in all of the alliance’s trade agreements. The included countries will opt to settle all transactions in national currencies rather than Western alternatives.
Bolivian President Luis Arce discussed the agreement and the BRICS payment system currently being developed by the bloc. Arce noted that the system was developed to compete with the dominance of both the dollar and the euro. However, using the local currency is an important part of facilitating its eventual emergence.
Since sanctions were imposed on Russia in 2022, the bloc has sought to avoid using the US dollar. This has to do with their steadfast commitment to promoting currency alternatives.
The said agreement would then be a big step towards those goals. An independent payments system will also facilitate that development because it is built on innovation BRICS Pay introduced last year.
