BRICS Move Away from Dollar: Loans Now in Yuan, Marking Shift in Global Power Dynamics

• The Chinese economy has a higher purchasing power and productivity compared to the United States and the G7 thus giving the BRICS movement a better advantage.
• Russia’s Finance Minister Anton Siluanov said that the negotiations with Chinese counterparts have been going on for a long time.

The ongoing de-dollarization around the world is palpable as the BRICS alliance further strengthens its inter-trade relations. The influence of the United States dollar is expected to significantly decline in the coming years, as more individual countries use respective fiat currencies and digital assets to settle international trades. 

The global shift of power was triggered by the mainstream adoption of Bitcoin (BTC), which is gradually being used as a reserve currency to hedge against rising fiat inflation. The ongoing wars, in the Middle East and Ukraine vs Russia, have escalated the de-dollarization as the rift between global superpowers increases.

Russia Signals Inevitable BRICS Rise

The BRICS alliance, consisting of countries that have historically been marginalized by the Western financial system, is on the precipice of dethroning the US dollar in global forex. According to Russia’s Finance Minister Anton Siluanov, there have been several discussions with the Chinese counterparts on the inevitable taking of loans in Yuan instead of the US dollar. Anton told state media on Monday that discussions on the matter have been ongoing for a long time despite the lack of a decision.

Furthermore, Anton highlighted that the topic on the matter was discussed last year during the inter-ministerial dialogue. Notably, Anton noted that Russia is more than ready to ditch the US dollar and use local currencies for international settlement. Remarkably, Anton noted that Moscow is ready to start testing payments in digital currencies with China and any other country within the Eurasian Economic Union.

The rise of the BRICS movement has been expedited by the ongoing sanctions from Washington geared to destabilize certain regions. The confidence in the BRICS alliance is from the fact that they have a higher purchasing power and cumulative gross domestic product (GDP) than the United States and also the G7. 

Consequently, the use of digital assets by retail and institutional investors to hedge against geopolitical uncertainties will significantly increase in the long haul.

Bitcoin and Digital Assets Benefits from Global Geopolitical Tensions

The escalating geopolitical differences that have resulted in notable shifts in global power dynamics have helped in the mass adoption of digital assets. For the first time in more than 25 months, Bitcoin price rallied above $56,600 even before the upcoming halving. 

The recent approval of spot Bitcoin ETFs in the United States has opened highways for cash inflows to the crypto industry. Furthermore, digital assets are largely decentralized and inclusive of all investors without discrimination of any kind. 

Ultimately, the digital asset industry led by Bitcoin and Ethereum will dethrone the precious metal industry in market capitalization. The rising global debt, which recently clocked above $300 trillion, is a clear signal that digital assets will rule in the coming decades.