Following years of abusing its reserve currency status, the United States now faces a growing wave of global de-dollarization as many of the largest and most populous countries on the planet are banding together to launch a U.S. dollar (USD) alternative to be used in global trade.
According to a report from a local news outlet, State Duma Deputy Chairman Alexander Babakov is encouraging the creation of a new common currency between Russia, India, and the other BRICS nations as a way to push back against USD hegemony.
BRICS, which is an acronym for five of the world’s leading emerging economies: Brazil, Russia, India, China and South Africa, has been receiving extra airtime as of late amid aggressive interest rate hikes by the Federal Reserve, which has put pressure on the currencies of other countries.
Babakov highlighted the fact that Russia and India would both benefit from the creation of a common currency that could be used for payments, calling it the “most viable” route to take at this time. “New Delhi, Moscow should institute a new economic association with a new shared currency, which could be a digital ruble or the Indian rupee,” said Babakov.
He went on to note that China would also play a crucial role in the development of a common currency as it would add an additional 1.4 billion participants to the system.
“New Delhi, Beijing and Moscow are the nations that now institute a multipolar world that is endorsed by the majority of governments,” he said. “Its composition should be based on inducting new monetary ties established on a strategy that does not defend the US’s dollar or euro, but rather forms a new currency competent of benefiting our shared objectives.”
The strength of the Russian ruble following heavy-handed sanctions by the U.S. and other European nations shows that there is a high level of opposition to the USD hegemony, and the BRICS nations see this as an opportune time to capitalize on the growing level of dissatisfaction towards the U.S.
“Our goal should be focused on writing new rules in the financial sphere in order to enable the use of an already common currency,” Babakov stressed. “It doesn’t matter whether it’s a digital ruble, a digital rupee, a digital yuan, or some other currency. But this currency must follow the laws of our respective nations.”
Even former Goldman Sachs chief economist Jim O’Neill, who coined the acronym BRIC, has called for the BRICS bloc to expand and challenge the dominance of the U.S. dollar as a way to combat the destabilizing effects the dollar’s dominance has on their monetary policies. (READ MORE)
