Last week, a Russian official announced that the BRICS nations are working to develop a "New currency," yet another sign that dollar dominance is waning.
Babakov said the BRICS nations are developing a strategy that "Does not defend the dollar or euro" and that "a single currency" would likely emerge within BRICS, pegged to gold or "Other groups of products, rare-earth elements, or soil."
In a recent paper published by Global Policy Journal, he urged the expansion of BRICS. "The US dollar plays a far too dominant role in global finance," he wrote.
According to the International Monetary Fund, the dollar's share of global foreign-exchange reserves fell below 59% at the end of 2021, extending a two-decade decline.
The only reason the US can get away with massive budget deficits and an ever-growing national debt to the extent that it does is due to the dollar's role as the world reserve currency.
It creates a built-in global demand for dollars and US Treasuries that absorb the money creation and maintain dollar strength.
What happens if that demand drops? What happens if BRICS develops its own currency and no longer needs dollars to trade?
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