Egypt Applies to Join ‘BRICS’ Alliance in Push to Topple U.S. Dollar Supremacy

Egypt is the latest country applying to join BRICS, an alliance made up of countries pushing to switch to alternative global trade currencies.

QUICK FACTS:

• Egypt has officially applied to join BRICS, an alliance between Brazil, Russia, India, China and South Africa attempting to push the switch to alternative currencies in trade.
• The African nation first voiced its intention to join BRICS last summer, and in February the country sent letters to officials expressing its support for joining.
• Around a dozen non-Western countries have applied so far to become members of the alliance, including Iran and Argentina.
• BRICS’ main initiative has been to establish a joint payment network to halt dependency on the Western financial system, especially the U.S. dollar.
• The alliance has been gaining popularity since Western countries placed sanctions on Russia over its military operation in Ukraine.

Egypt🇪🇬 has officially applied to join BRICS, with Russia🇷🇺 formally accepting Egypt’s bid to join the group.

Egypt has already begun to drop the dollar from trade with Russia, India🇮🇳 and China🇨🇳.

Egypt is projected to be one of the fastest growing economies in the world… pic.twitter.com/QOHKzHzqMH

— Going Underground (@GUnderground_TV) June 14, 2023

CHINA’S COMMUNIST PRESIDENT XI JINPING ON DEVELOPING A ONE-WORLD CURRENCY:

“We should push for an open world economy, promote trade liberalization and facilitation, jointly create a new global value chain, and realize a global economic rebalancing,” Xi told BRICS LEADERS.

BACKGROUND:

• Sanctions imposed on Russia under the Biden administration, following Russia’s military action in Ukraine, have shaken the foundation of the U.S. dollar’s global dominance.
• The freeze of half of Russia’s $640 billion in gold and FX reserves ignited fears in nations, leading to a strategic re-evaluation of their reliance on the dollar.
• Stephen Jen, CEO of Eurizon SLJ Capital Limited, detailed, “What happened in 2022 was a very sharp plummeting in the dollar share in real-terms,” indicating that these changes came as a direct response to the sanctions imposed on Russia.
• This reaction engendered a major reassessment regarding currency diversification in nations such as Saudi Arabia, China, India, and Turkey.
• Currently, countries rely on dollar reserves to safeguard their economies during crises, and commodities trade in dollars ensures stable prices and controls inflation.
• However, the sanctions against Russia have created fissures in this system.
• If nations decide to shift away from the U.S. dollar as a reserve currency due to these concerns, it could potentially undermine the dollar’s standing as the global economic anchor, affecting U.S. economic influence and potentially disrupting global financial stability.