BRICS nations are currently debating the merits and drawbacks of abandoning the U.S. dollar in international settlements, following calls from Syrian President Bashar Assad. While advocating for the adoption of the Chinese yuan for cross-border trade, Assad emphasizes that the BRICS bloc could play a significant role in these developments, thus leading to a profound impact on the global financial system. However, critics argue that this move would require a significant shift in international power dynamics, and could exacerbate existing tensions between BRICS nations and the West.
Proponents of ditching the U.S. dollar in international settlements argue that this change is necessary due to the increasing economic clashes with Western countries. By adopting the Chinese yuan as the global transaction currency, they believe that the BRICS nations would be able to assert greater financial independence and reduce the existing hegemony of U.S. currency in global trade. Furthermore, the inclusion of other nations, such as Iran and Saudi Arabia, currently applying for membership in BRICS, is seen as a way to further solidify this potential multipolar order.
On the other hand, critics of this proposal argue that abandoning the U.S. dollar would not only further escalate tensions between the BRICS nations and the West, but could also lead to serious consequences for financial stability. For instance, a sudden shift in currency preferences could trigger destabilizing currency fluctuations and disrupt existing trade relationships.
Another point of contention revolves around the influence of China within the BRICS bloc. While some members may be receptive to increasing Chinese influence and adopting the yuan, others may not welcome these changes so readily. This potential disagreement within the bloc could undermine the push for a unified alternative to the U.S. dollar.
In conclusion, the debate on whether to discard the U.S. dollar in international settlements brings to light the underlying conflict between the BRICS nations and the West, as well as the power dynamic within the bloc itself. While the adoption of the Chinese yuan could potentially give the BRICS nations greater financial autonomy, there is a need to balance the benefits and drawbacks, and the impact such a move could have on international relations and the existing financial landscape.