Brics, Dollar, or Bitcoin

Mike Leslie
March 24, 2024

The BBC explains that in 2006, Brazil, Russia, India, and China created the "Bric" group. South Africa joined in 2010, making it "Brics."

Inputs that matter: Since 1971, the U.S. Dollar has been the world reserve currency and the primary means of payment for oil exports.

  • Brics was designed to combine the developing countries in opposition to the Western European and North American nations.
  • The BBC reports that "Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE) were invited to become members, effective 1 January 2024."
  • All of the BRICS members currently settle oil sales in U.S. Dollars.

The opportunity: According to Watcher.Guru Russia is pushing the de-dollarization initiative in Africa, encouraging nations to trade in local currencies.

  • The European Parliament explains, "On 1 January 2024, BRICS – the intergovernmental organisation comprising Brazil, Russia, India, China and South Africa – admitted four new members: Egypt, Ethiopia, Iran and the United Arab Emirates."
  • European and North American countries are concerned about the effect of a potential BRICS+ currency that bypasses the U.S. dollar as the currency for global oil trade.

Zoom in: The International Monetary Fund (IMF) reports, "In 1971, U.S. President Richard Nixon announced the suspension of the dollar's convertibility into gold."

  • The U.S. Dollar is losing its grip on global economic activity as cryptocurrency exchange Lemon reports that Argentina is the latest to move to Bitcoin (BTC) in favor of the dollar.
  • President Bukele made headlines in September 2021 when he declared BTC a legal currency for El Salvador.
  • Right now, the choices are to side with the U.S. and Western European countries, join the BRICS, or adopt cryptocurrencies.

Between the lines: Globalization has been increasing since the 1950s.

  • The U.S. Dollar and global oil were the first wave.
  • According to the Cato Institute, digital trade is the hottest area of globalization today.

Follow the money: The Cato Institute reports, "Put simply, you don't need the permission of the Federal Reserve, Congress, any company, or any individual to use Bitcoin."

  • Central Bank Digital Currency (CBDC) is largely a retaliation to cryptocurrencies, removing anonymity while centralizing control.
  • For BRICS countries, the desire to replace the U.S. Dollar for oil trade has resulted in the formulation of the proposed CBDC.
  • Those countries that are left out of the U.S. Dollar program and BRICS developing CBDC may use existing cryptocurrencies as a trade medium.

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