The planned BRICS currency has the potential to have a substantial influence on the global economy. However, there are also hazards involved with using the BRICS currency, such as the possibility of increasing tensions between superpowers and facilitating criminal operations. Before the BRICS currency is implemented, the dangers and advantages must be thoroughly assessed. Without question, the BRICS currency is a difficult problem with several possible ramifications. Before implementing the currency, it is critical to consider the risks and rewards.
The BRiCS currency has to first be a reserve currency before it can compete with the USdollar which is a reserve currency. As of today, the BRICS currency is not a reserve currency. So, its difficult to see how the BRICS currency would compete with the superpowers
The BRICS currency is intended to reduce their dependence on the US dollar and to enhance their trade and financial integration but using the BRICS currency to increase tension between the superpowers at the level of international politics could have serious risks which can include:
- Provoking a backlash from the US and its allies, who may impose sanctions, tariffs or other measures to counter the BRICS currency.
-Undermining the stability of the global financial system, which relies on the US dollar as the main reserve currency and the medium of exchange for most transactions.
-Creating divisions within the BRICS group itself, as some members may have different interests and preferences regarding the use and management of the BRICS currency.
- Exacerbating existing conflicts and disputes among the superpowers, such as trade wars, territorial disputes, cyberattacks or military interventions.
The BRIC nations, though significant, have varied economic strengths, sizes, and development stages. A unified currency could disproportionately benefit a more dominant country while disadvantaging others, leading to intra-group tensions.
If BRICS+ demanded that you pay each member in its own national currency in order to trade with any of them, the dollar's role in the world economy would go down. There would not be a clear replacement for the dollar as a global reserve. A variety of currencies would gain in importance.
There is not an immediate threat to the dollar over the next 10 years; any threat to the dollar or competitor to the dollar would be a slower-moving kind of snowball effect.
Currently, U.S. economic growth has proved resilient despite aggressive Federal Reserve interest rate hikes in 2023. Strong growth and higher U.S. interest rates have led to the U.S. dollar index hovering toward the high end of its 20-year range.
Greater shifts in the political economy of the world system will take place, Mohammed Saaida , but imo this will happen like a slow time series of qualitative steps into a quantitative effect over about a decade.
With respect to economic history, we can observe that neither wars or revolutions can accelerate economic progress, which is a result of peaceful economic cooperation and accepting changing social realities such as population dynamics, tech-know-logical resource efficiency and human capital development.
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A progressive economy is not an economy in which no capital is ever lost, but an economy which can afford to lose capital because the productive opportunities revealed by the loss are vigorously exploited. ― Ludwig Lachmann, Capital and Its Structure
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