ArticleCity.comArticle Categories What is BRICS? | Everything You Need to Know China Yuan Currency

What is BRICS? | Everything You Need to Know China Yuan Currency

Photo from Unsplash

Originally Posted On:


In the realm of international geopolitics and economics, the acronym “BRICS” has gained prominence over the past two decades. Initially comprising Brazil, Russia, India, China, and later South Africa, these countries formed a strategic alliance that has been seen as an emerging counterpart to the Group of Seven (G7). As of late, there’s been buzz about the expansion to BRICS— referred to as “BRICS+” — an extended group with huge potential for economic and geopolitical ramifications. With the upcoming BRICS+ meeting in August, the world watches as these nations assert their collective power and explore ways to reshape the global economic landscape.


What is BRICS?

The name BRICS was initially coined in 2001 by Jim O’Neill, then a Goldman Sachs economist, as an acronym to represent the burgeoning economic powerhouses of Brazil, Russia, India, China, and South Africa. These nations, though diverse in culture, geography, and political systems, shared a common aspiration: to challenge the dominance of Western economies. Since its founding, the BRICS group has focused on economic cooperation, development, and international representation.

Who Has Joined BRICS?

The core BRICS countries are Brazil, Russia, India, China, and South Africa, with South Africa being the latest to join the group. The potential expansion to BRICS+ could include nations such as Mexico, Turkey, Indonesia, and others. According to South Africa, 20 countries are looking to join the group.

BRICS+: Expanding Horizons

As more and more countries have applied for membership to BRICS, the five-country acronym has become slightly outdated. BRICS+ was coined to help show the growing size and expansion of the group. Building on the foundation of BRICS, the concept of BRICS+ emerged as other like-minded developing economies joined to enhance the coalition’s collective influence and resources. Having joined forces, these countries hope to drive global economic policies in a way that aligns with their interests, with a focus on breaking from Western economies.


Impact on the U.S. Economy

The emergence of BRICS and its potential expansion to BRICS+ raises questions about its impact on the U.S. economy. As these nations collectively gain influence and economic strength, they could challenge traditional Western dominance in global economic decision-making. This shift may lead to the reconfiguration of trade alliances, investment patterns, and global financial institutions, potentially affecting the U.S.’s position as an economic powerhouse.

The August Meeting Agenda: Dethroning the Dollar

The upcoming BRICS+ meeting in August holds significance for both the member countries and the global community. As these nations convene, they will likely discuss a range of topics, but the one with the most eyes on it is the group’s efforts towards de-dollarization.


BRICS has been exploring strategies to reduce their dependence on the U.S. dollar in international trade and financial transactions. The member countries aim to diversify their currency holdings, promote the use of their own national currencies, and lower their reliance on the U.S. dollar.


What is BRICS’ New Currency?

There is no official “new currency” that BRICS as a group has adopted- yet. Instead of creating a new single currency, BRICS countries have focused on using their own national currencies more extensively in bilateral and multilateral trade agreements. BRICS members have emphasized the Chinese yuan through their economic and internationalization efforts, leading to plenty of speculation, but as of right now, each country in the group retains its own sovereign currency.


Yuan vs. the Dollar: BRICS Adopting Yuan as Its New Currency

While the BRICS member countries have shown interest in reducing their reliance on the U.S. dollar, it’s important to clarify that the term “new currency” might be misleading. The Chinese yuan has gained traction in international trade and finance, and some BRICS countries have indeed increased their use of the yuan in bilateral trade agreements. China’s efforts to internationalize the yuan have led to its inclusion in the International Monetary Fund’s Special Drawing Rights (SDR) basket, enhancing its status as a global reserve currency.

However, the yuan has not become the sole currency for BRICS trade, and each member continues to use its own currency in transactions. The widespread adoption of the yuan is part of the broader diversification strategy aimed at reducing these countries’ dependency on the U.S. dollar.

Is BRICS a Threat to the Dollar?

The BRICS initiative to promote the use of their own currencies in international trade and financial transactions is often seen as a potential challenge to the dominance of the U.S. dollar in the global financial system. BRICS’ aim to move away from the dollar poses a threat to its world dominance, but the dollar has a few very key factors going for it:

Size and Strength: The combined economic strength of the BRICS member countries is significant, but the U.S. dollar’s role as the world’s primary reserve currency is deeply entrenched due to the size and stability of the U.S. economy.

Global Trade: The U.S. dollar is still the most widely used currency in international trade and finance. While the BRICS countries have made efforts to use their own currencies more, the dollar’s dominance remains strong for now. This confidence in the dollar stems from its perceived stability and liquidity, contributing to its continued use as a global reserve currency. While we do see this confidence has waned over the years, the dollar is so entrenched in economies across the globe it will take something major to truly break.

Diversification: Many countries, including BRICS members, aim to diversify their currency holdings to mitigate risks associated with overreliance on any one currency. One way they aim to do this is by increasing their gold reserves. Interestingly, stocking up on precious metals, specifically gold, is a common sign of investors losing trust in the dollar.

Is BRICS a political alliance or an economic group?

BRICS is primarily an economic grouping focused on economic cooperation, trade, investment, and development. While it does engage in discussions on political and global governance matters, its main emphasis is on economic collaboration.


BRICS countries collectively represent diverse geopolitical interests and challenge traditional Western dominance in international affairs. BRICS is not a direct competitor to other organizations like the United Nations or the G7. BRICS is not a formal military alliance like NATO. It is primarily an economic and political grouping, meaning security discussions among BRICS members are limited compared to the military focus of organizations like NATO.

Bottom Line

The evolution of BRICS reflects the shifting dynamics of global economics and geopolitics. As these nations continue to assert their collective influence, the implications for the U.S. economy and the global order become increasingly noteworthy. The August meeting holds the promise of shaping a new economic landscape. As the world watches, the outcomes of this meeting could redefine the strength of the dollar and the balance of power on the global stage.

For savvy investors who can see what’s coming on the horizon with the potential decline of the dollar, the U.S. Gold Bureau has the gold coins and bullion to help protect their purchasing power.

No Comments

Sorry, the comment form is closed at this time.