BRICS News: 12 Countries Drop US Dollar, Conduct Majority of Trade in Local Currencies While Eyeing Crypto

• The members of the CIS alliance have started conducting trade settlements in local currencies.
• The goal remains to alleviate the strains from over-dependence on the US Dollar.

The Commonwealth of Independent States (CIS), consisting of 12 countries, now conducts most of its trades with local fiat currencies. This move aligns with the BRICS alliance’s de-dollarization efforts to dump the US dollar for trade settlement. 

The CIS countries include Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Georgia, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. On the other hand, the BRICS nations initially include Brazil, Russia, India, China, and South Africa. This year, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates have joined the bloc.

CIS Dumps US Dollar for Local Currencies

Russia, also a member of the BRICS bloc persuaded the CIS to switch from using the US Dollar to national currencies for trade. The other current members concurred with Russia’s proposed trade policy since adopting local currencies would boost their economies. 

This year, the CIS bloc rarely utilized the US dollar for trade settlements. Instead, the alliance settled 85% of cross-border transactions in national currencies, adding pressure to the US Dollar. 

Russian President Vladimir Putin revealed at the CIS summit that BRICS and CIS will collaborate to permanently eliminate reliance on the US dollar. 

“The process of import phase-out is moving quickly, and thus the technology sovereignty of our country is being strengthened,” he said.

Thus, the BRICS-specific de-dollarization goal is now being extended to the CIS alliance. The de-dollarization initiatives promote regional economic collaboration and deliver higher financial independence for emerging countries. If the current trend persists, the dollar may lose its value, leading to massive deficits and hyperinflation in the US.

The CIS Eyeing Crypto

In the future, the CIS alliance intends to incorporate crypto for cross-border trade settlements. Cryptocurrencies have heralded a new shift to payment services in the last few years. They promise faster, cheaper, and more transparent transactions, especially across borders due to their anonymity and decentralized framework.

As CNF noted in a previous report, Russia has approved crypto for international payments. This move is part of the country’s attempt to alleviate pressure from Western sanctions while reducing dependence on the US dollar. This development follows the government’s legalization of Bitcoin mining back in July.

Besides Bitcoin, XRP has become a major rival to the US dollar. Despite Ripple’s ongoing legal challenges with the US Securities and Exchange Commission (SEC), the BRICS bloc and Japan are pushing for XRP adoption. In a recent update CNF covered, Ripple’s CEO Brad Garlinghouse says XRP is at the heart of global financial systems.

It is important to note that BRICS has extended its investigation into using gold to challenge the US dollar. Nonetheless, BRICS and CIS have yet to name any digital asset as their official currency among member nations. As blockchain and the global financial system progress, many expect this will happen soon.