In recent years, the BRICS nations (Brazil, Russia, India, China, and South Africa) have been accumulating vast amounts of gold, with the aim of reducing their reliance on the US dollar and undermining the dominance of the currency in global trade. As the US continues to impose sanctions on countries like Russia and China, these nations are looking to strengthen their economies by diversifying their reserves and reducing their exposure to the greenback. This article by The Daily Hodl explores the BRICS nations’ plans to buy massive amounts of gold, and what it could mean for the future of the US dollar as the world’s reserve currency.
According to a new report from U.S. Global Investors, a group of nations known collectively as BRICS are purchasing huge amounts of gold as they prepare to move away from their reliance on the U.S. dollar. The report states that the nations will continue to be “huge buyers” of gold for the foreseeable future, led by China. U.S. Global Investors’ CEO and Chief Investment Officer, Frank Holmes, has said that the mass accumulation of gold aligns with the theory that the world is on a long-term path to economic bifurcation. BRICS nations’ share of the global economy has reportedly surpassed that of the G7 nations, for the first time, on a purchasing parity basis.
The World Gold Council has reported that China has added 102 tons of gold to its stockpiles since the start of the year. Gold is now key to this potential multipolar economic future, as it will likely be used to back the creation of a new currency that does not use the USD. BRICS nations are reportedly in the early stages of designing a new currency that aims to end global dependence on the dollar. This currency could be supported by the precious metal, and used to shift away from the US dollar that has served as the global foreign reserve currency for nearly a century.
More and more global trade is being conducted in the Chinese yuan, and there are reports that the BRICS (which could eventually include other important emerging economies such as Saudi Arabia and Iran) are developing their own medium for payments. Billionaire Chamath Palihapitiya, however, has argued that China will never effectively de-dollarise as long as the yuan remains pegged to the dollar.
It remains to be seen how effective the efforts of the BRICS will be. It is clear however, that the accumulation of gold is an important step towards creating a more multipolar world economy that will no longer be dominated by the US.
