The historic step towards global de-dollarization was made at the conclusion of the 2024 BRICS summit in Kazán, Russia. A multi-currency system more inclusive in nature is on the cards as China and its BRICS partners strive to reduce reliance on the dollar and de-dollarize internationally.

The Rise of Dollarization

It has been for over half a century that the U.S. dollar has been the world’s main reserve currency thanks to the Bretton Woods Agreement and the U.S. economy and military might. The position of the dollar has given the U.S. a lot of leverage over the global economy. But the power of the dollar squeezes other nations economically too, forcing many of those countries to look for fresh trading and reserve arrangements.

China’s Economic Strategy and the Yuan’s Growth

Since 2013, China has vigorously pushed for the internationalization of the yuan, signing more than 40 currency swap agreements with nations in Asia, Europe and Latin America. Now, nations like South Korea, Japan, Malaysia, Indonesia, Germany and the UK directly trade in yuan, without U.S. dollars as an intermediary. Second, offshore yuan centers in Hong Kong and London have helped put the yuan on the map in terms of its role in international transactions.

BRICS 2024: A United Push for De-Dollarization

At the recently concluded BRICS summit in Kazán, the bloc’s commitment to reshape the financial landscape was underscored. Leaders of Brazil, Russia, India, China, South Africa, and newly admitted BRICS members—Egypt, Ethiopia, Iran, and the UAE—agreed in principle to establish a multicurrency payment platform, a system which could........

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