The US dollar is facing challenges from developing countries that are threatening its status as the global reserve currency. A handful of alliances in Asia, Africa, and South America are looking to end dependency on the U.S. The BRICS and ASEAN groups are at the forefront of challenging the US dollar’s status.
Developing countries fear U.S. sanctions could hurt their economies and, therefore, want to strengthen their local currencies and economies. The de-dollarization efforts are in full swing in 2023, and nearly two dozen countries want to ditch the U.S. dollar.
Two different alliances have officially agreed to ditch the U.S. dollar for global trade in 2023. In March 2023, the ASEAN bloc was the first to decide not to use the U.S. dollar for cross-border transactions. The leaders of 10 Southeast Asian nations signed a declaration to stop using the U.S. dollar and promote their local currencies instead.
Additionally, the BRICS alliance concluded to stop settling international trade using the U.S. dollar at the summit in August this year. BRICS will use local currencies for trade and is also looking to create a common currency among member nations. The trade will be settled within the existing bloc of 10 countries and not with other nations outside the alliance.
The ASEAN group consists of 10 countries, and the BRICS alliance is now an 11-member group. In conclusion, a total of 21 countries have officially agreed to ditch the U.S. dollar for global trade in 2023. Read here to know what could happen to the U.S. dollar if BRICS and ASEAN stop using USD for trade.
The ASEAN bloc of 10 countries includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. Also, the BRICS alliance includes Brazil, Russia, India, China, South Africa, Saudi Arabia, UAE, Egypt, Iran, Argentina, and Ethiopia.
