The BRICS emerging economies have made significant progress over the past two years in their mission of reducing dependence on the US dollar.
The bloc recently confirmed that it is developing a new currency and is calling for more support.
BRICS is expected to provide updates on the new currency at the BRICS Summit in October in Russia.
According to Watcher.guru, BRICS aims to launch a new currency backed by gold against the US dollar. A common currency will bring the alliance into a new financial era and become the foundation for further development.
In addition, with the recent gold buying fever of BRICS, some financial experts believe that a currency backed by gold could mark the " beginning of the end" of the USD.
In an analysis for the intelligence consultancy GIS released last week, expert Vahan Roth wrote about the recent sharp increase in gold prices.
Gold prices hit a new record high of $2,480 an ounce on July 17, 2024.
Roth said the rally was not surprising given the ongoing geopolitical situation in the world.
There are two wars going on in Ukraine and the Middle East and one of the two (or both) could escalate at any time into a wider international conflict, he said.
Meanwhile, the extremely influential elections taking place this year in India, the UK and the European Union (EU) are taking place. Some of the current leaders have lost influence. Mexico has a new leader with the same left-wing program and the unpredictable US presidential election in November is approaching, Mr. Roth noted.
The World Gold Council said BRICS has been the largest gold buyer since 2022. This bloc is accumulating tons of precious metals in its reserves.
Mr. Roth pointed out: BRICS is in favor of a more multilateral world order and the groups founding members have proposed the idea of a gold-backed currency.
Regardless of how people evaluate the real outlook for such a currency and its potential impact on the real world, and despite the fact that BRICS is a rather loose alliance (for example, compared to the EU), BRICS still includes about 3.5 billion people, equivalent to 45% of the global population, controlling 30% of the world's mainland area and its member economies accounting for more than 37% of global GDP.
GIS experts note that a gold-backed BRICS currency could be a game-changer in the financial world. This currency could also push the USD back.
Developing countries may begin to de-dollarize and accept the new BRICS currency for cross-border transactions. That will help strengthen BRICS and other emerging economies.
