Will BRICS Bring Down the US Dollar? Should You Be Concerned?
The question of whether the BRICS alliance (Brazil, Russia, India, China, and South Africa) can dethrone the US dollar as the world's reserve currency is gaining traction. With the addition of new members like Egypt, Iran, Ethiopia, and the UAE, this question carries even more weight.
The BRICS Monetary Goals and the US Dollar's Dominance
The long-term monetary goals of the BRICS bloc, comprising Brazil, Russia, India, China, and South Africa, with new members such as Egypt, Iran, Ethiopia, and the UAE, aim to create a more multipolar financial system. But can they truly challenge the dollar's dominance?
Given the recent expansion of the “BRICs” countries to include five new members, will the US dollar remain the world’s reserve currency? Many analysts are weighing the potential impact.
The Decline of the Dollar: A Gradual Shift?
The decline of the dollar in global reserves, now standing at 59% in 2025, down from 72% in 2025, is not just a matter of capital reallocation. It embodies a gradual shift in economic power. This trend is prompting discussions about alternative currencies and trading mechanisms.
Potential Concerns and Countermeasures
The implications of a weakening dollar are significant for the US economy. However, the US has tools to counteract any attempts to undermine its currency. Franklin Templeton analysts are closely monitoring the situation to assess the risk to US investors and the broader global financial landscape.
Historical precedent and current geopolitical tensions suggest that any attempt to rapidly displace the dollar could face resistance. As U.S. President-elect Donald Trump has warned, the BRICS countries that if they attempt to replace the “mighty U.S. dollar” they would face “100 percent tariffs and should” be prepared for strong countermeasures.
Should You Be Concerned?
While a complete dethronement of the dollar in the short term is unlikely, the gradual erosion of its dominance is a trend worth watching. Diversifying investment portfolios and staying informed about global economic shifts are prudent strategies in this evolving landscape. Consult with a financial advisor to assess your individual risk tolerance and investment goals.