Russia, one of the founding members of the BRICS alliance, is hosting the 16th summit in the region of Kazan, where for the first time nine member states, including four new members, Egypt, Ethiopia, Iran, and the UAE, will be a part of that summit due to the extension. BRICS is advancing towards further expansion, where many new nations will be given invitations to join.

The larger the BRICS grows in 2024, the bigger the US dollar faces peril as the bloc is trying to reduce reliance on the US dollar. The main objective of the coming summit is further expansion and de-dollarization.

According to the latest update for April 2024, 40 new developing countries are willing to join the alliance this year. Russia’s state secretary and deputy minister of foreign affairs has confirmed that BRICS has received 40 applications for membership. The alliance is taking de-dollarization activities, calling on other countries to break links with the USD. Before launching a new currency, it seems to be busy strengthening the local currencies for cross-border trade. Keeping the local currencies in the driver’s seat of the global economy will push the US dollar into the back seat.

Throughout the last year, the group didn’t seem shy about its ambitious initiatives. They have embraced the expansion, which made the bloc twice its initial size. Moreover, it seems to challenge Western economic dominance. The alliance is moving forward to abolish the US dollar in all of its global trade and transition this year. It is also willing to strengthen its native economies and businesses while putting local currencies ahead of the U.S. dollar. China and Russia have signed an agreement to use their local currencies Up to $260 billion. This deal is initiated to settle payments in exchange for commodities purchased between two neighbours.

Both states have decided to settle payments in the Chinese Yuan and Russian Rubles instead of the US dollar, where 95% of the $260 billion trade worth will be in the Chinese Yuan and 5% in the Russian rubles and Euro. The developments indicate that the BRICS bloc is taking serious steps and will do everything on the agenda of de-dollarization. There is no doubt that the US will not keep itself down without fighting and will respond.

According to the Financial Times report, Alliance is planning a remarkable $13.5 billion oil investment. The investment will include the United Arab Emirates, one of the four new members of the bloc.

The country is ready to invest the funds in Brazil; the majority of them will be invested in the biofuel sector. However, it is part of a much larger investment strategy. Also, there are plans for a new stock exchange to be set up in the country.

The relations could eventually lead to the establishment of a new stock exchange in Brazil. The continued relationship will be based on both countries’ strengths, with Brazil’s agricultural prowess helping the UAE’s oil and vice versa. BRICS is focusing on controlling the global oil sector and bringing the US dollar down using local currencies for trade.

The alliance has been somewhat successful in the agenda of de-dollarization in the last 24 months and is trying to push further. The bloc has inducted four new oil-producing countries. An invitation is also sent to the top oil exporter, Saudi Arabia. The Kingdom is focusing on its option of joining the alliance. There are chances that Saudi Arabia could accept local currencies for oil and reduce the US dollar for payments. If Saudi Arabia enters an alliance, it can change the supply dynamics of the global oil and gas industry. Whereas 20% of all oil transactions were settled in local currencies in the last year, Saudi Arabia’s entry into the BRICS can change this number.

The alliance already dominates 43% of the global oil supply, threatening the prospects of the US dollar. These developments will affect many financial sectors in the U.S., leading to a market decline in the coming years. If developing nations, including the BRICS alliance, ditch the dollar for trade, the USD currency will return to the homeland.

Three U.S. sectors will be directly affected if BRICS dumps the dollar for trade Banking and Finance, Technology and Fintech and  Consumer Goods and Retail.

First and foremost, the banking and financial sectors will be in difficulty as foreign exchanges will begin to decline. The forex markets run on supply and demand, and if the demand for the USD dips, the U.S. Central Bank will find it difficult to import the dollar. If the Central Banks of BRICS members don’t assemble the dollar, the U.S. will see its currency returning home and this return of the currency will lead to hyperinflation in the homeland. Then the technology sector will suffer as inflation in the United States causes employment losses. Furthermore, Multinational corporations have to spend more money to keep enterprises afloat and stay on top without drowning.

Lastly, everyday consumer goods in the retail sector will see uncontrolled prices. Also, inflation will take a grip on the US markets, leading to the prices of day-to-day commodities turning expensive. Moreover, the Biden administration must find options to stop the decline of the U.S. dollar. BRICS has the power to bring down the US economy if they cease taking the dollar as payment.

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