BRICS nations, which include Brazil, Russia, India, China, and South Africa, are reportedly planning to introduce a new gold-backed reserve currency, as indicated by reports surfacing this weekend.
This new development is expected to be officially announced during the BRICS summit in South Africa in August.
Thorsten Polleit, Chief Economist at Degussa, shares insights about the implications of the proposed currency, ZeroHedge reports.
“At first glance, a new transaction unit, backed by gold, sounds like good money. It could lead to a sharp devaluation of many fiat currencies vis-à-vis the yellow metal and could catapult up goods prices in terms of fiat currencies. It could be a shock to the global fiat money system. I am not sure that this is what the BRICS wish to achieve,” he said.
Despite this significant move from the BRICS nations, U.S. Treasury Secretary Janet Yellen appeared unfazed.
“I just want to reiterate what I’ve said in the past. I think the United States can rest assured that the dollar is going to play the dominant role in facilitating international transactions and serving as a reserve currency in the years ahead. I don’t see that role being threatened by any development including the one that you’ve mentioned,” Yellen commented over the weekend.
This significant development from the BRICS nations is seen as part of a broader shift away from the U.S. dollar’s dominance in international transactions. The gold-backed currency is seen as a significant challenge, and with over 60 countries purportedly lined up to join the BRICS alliance, it has drawn significant attention.
Andy Schectman, in a discussion two months ago, highlighted the importance of this move. He stated, “When you look at countries that have expressed interest in joining BRICS, they all have substantial gold holdings. The numbers are increasing among those who want to join, there’s over 60 countries they have lined up in a queue.”
Despite the wave of change, Yellen remains resolute in her conviction about the continued dominance of the dollar.
Her reassurance, however, is met with increasing skepticism as the gold-backed currency is set to be launched.
This move by the BRICS nations is not just a crucial step towards de-dollarization, but also a strong reaffirmation of gold’s value in the global economic order.
Despite the uncertainty surrounding its implementation, the wheels of this financial revolution are seemingly already in motion.
