BRICS+ Currency Challenges US Dollar Dominance
The BRICS+ group, formed by emerging economies including Brazil, Russia, India, China, and South Africa, has been working on a new currency and payment system called the UNIT. The UNIT is designed to reduce dependence on the US dollar in international trade, which could potentially challenge its role as the world's dominant reserve currency.
The UNIT would be backed by a fixed basket of 40% gold and 60% BRICS+ currencies, with a digital platform using blockchain technology for transparent transactions. The system aims to reduce exposure to financial volatility and target speculation on single currencies.
BRICS+ countries have been expanding their membership and influence, with the group now accounting for nearly 36% of the world's territory and 48.5% of its population. They also hold a significant portion of global gold reserves, with China and India accumulating an additional 572.5 tonnes between 2019 and 2024.
The success of the UNIT depends on establishing a credible governance framework for BRICS+ countries to agree on the rules and practices governing its use.