lan Transnational & Economic Shifts

De-Dollarization Alliances

Several countries are actively reducing their use of the US dollar for global trade. Led primarily by the BRICS nations, including Brazil, Russia, India, China, and South Africa, these states are creating agreements to trade in their own local currencies. This shift aims to reduce the risk of US economic sanctions and decrease dependence on the US financial system. Recent events, such as the 2022 US sanctions on Russia, accelerated this process. China is actively signing currency swap agreements with nations like Saudi Arabia and Brazil to settle oil and goods trades in the Chinese yuan.

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Core Context Pillars

Pillar 1

BRICS nations agreed at the 2023 Johannesburg summit to expand local currency trade and explore a joint currency.

Pillar 2

China and Brazil signed an agreement in March 2023 to bypass the US dollar and trade directly in yuan and reais.

Pillar 3

Russia demanded payment in rubles for its energy exports in 2022 after Western countries froze its foreign reserves.

Pillar 4

The Shanghai Cooperation Organisation is testing regional payment systems to bypass the SWIFT banking network.

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Revision Keywords

BRICS

An alliance of Brazil, Russia, India, China, and South Africa that leads the push for local currency trade.

SWIFT

The global financial messaging system that Western nations used to sanction Russian banks in 2022.

Petroyuan

The concept of pricing and selling crude oil in Chinese yuan instead of US dollars.

Currency Swap Agreement

A contract between two countries to exchange a set amount of their respective currencies to facilitate direct trade.

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Perspective Vault

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A reality check for BRICS and the lofty dedollarisation agenda

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