Throughout the annals of history, the Dollar has reigned supreme as the most heavily traded currency in the global economic arena. Despite not boasting the highest intrinsic strength, the Dollar undeniably holds a preeminent position, standing as one of the most traded currencies worldwide. Found in abundance within the vaults of financial institutions across the globe, it serves as a dominant force, often constituting a staggering 80% of foreign exchange reserves. However, the sands of time are witnessing a shift in the Dollar's global standing, as new titans rise, coalescing to challenge its hegemony.
Enter BRICS—an intergovernmental organisation uniting the economic prowess of Brazil, Russia, India, China, and, more recently, South Africa. Officially established in 2010, the term "BRICS" was initially coined in 2001 by the Chairman of Goldman Sachs, identifying
these nations as some of the fastest-growing economies globally. Together, they account for approximately 41% of the world's population and contribute 26% to the global GDP. The potential of this coalition to evolve into a formidable trade bloc is undeniable. Notably, oil giants like Bahrain and the UAE are already distancing themselves from the Dollar, seeking membership in BRICS, signalling potential challenges for the reigning currency.
Despite harbouring qualities that pose a credible threat to the Dollar, any imminent upheaval remains a distant prospect. Economists project a formidable climb for BRICS should they decide to adopt a common currency, with predictions leaning towards a trajectory akin to the Euro's rise, rather than an outright dethronement of the Dollar. Instead of an outright conquest, BRICS might carve out its own territory within the currency landscape, resembling more of an encroachment on the Dollar's territory. In its infant stages, BRICS' trajectory remains unpredictable, making it challenging to foresee a complete overthrow of the Dollar, affirming the Dollar's enduring prominence in international trade.