Although BRICS countries are continuously trying to escape dependence on the US dollar, according to a senior leader of the Brazilian Central Bank, this goal is still a " distant dream" for at least the next decade.
Reuters reported that speaking at a webcast on May 19, Mr. Nilton David - Director of Monetary Policy of the Central Bank of Brazil - commented: "Currently, there is no significant amount of assets priced at BRICS currencies that can replace the role of the USD. I don't think this will change in the next 10 years."
While admitting that some alternative payment instruments could develop and boost bilateral trade, Mr. David said this is not strong enough to shake the central role of the USD in any real scenario.
The above statement was made in the context of BRICS trying to find a way to de-dollarize, reducing dependence on the USD in international payments. This year, Brazil holds the rotating presidency of BRICS.
According to Reuters, during the 2024 BRICS presidency, Brazil will temporarily put aside discussions on the BRICS common currency. Instead, the priority will be to connect the payment system and test blockchain standards proposed by international organizations such as the Bank for International payments (BIS).
Not only talking about the USD, Mr. David also mentioned Bitcoin - one of the assets expected to replace legal tender in the future. However, his view is very clear: Bitcoin is essentially a speculative asset.
He said Brazil's foreign exchange reserves are currently around 340 billion USD and are still largely in USD, as almost all of the country's foreign transactions are paid in USD.
Since its inception in 2009, BRICS - including Brazil, Russia, India, China - has expanded to include South Africa, and recently a series of new members including Egypt, Ethiopia, Indonesia, Iran and the UAE. However, the scale of domestic-current financial assets of these countries is still too small compared to the USD assets that are dominating the world.
Despite its ambitions to create a more multilateral financial order, BRICS still does not possess a market strong enough to compete directly with the US-led financial system. Therefore, the dream of "losing the throne" of the USD seems to be still very far away.
In the eyes of experts like Mr. Nilton David, for at least the next 10 years, the USD will still be the "only player" dominating the global currency playground.
In Vietnam, Bitcoin and other cryptocurrencies are not recognized as legal payment methods and are not protected by law. Investors need to be cautious, avoiding risks from strong price fluctuations and fraud related to cryptocurrency.
