BRICS countries are looking to sideline the U.S. dollar by launching a new currency to settle international trade. The development challenges the dollar’s supremacy and could dethrone it from the global reserve status. The move is inspiring other developing Eastern countries to ditch the dollar and promote their native currencies for global trade. If the momentum continues, many more Eastern nations could join hands and end reliance on the U.S. dollar completely.
The leaders of 10 Southeast nations and the members of the Association of Southeast Asian Nations (ASEAN) have agreed to promote their native currencies for cross-border transactions. The 10 countries will reduce settling payments with the U.S. dollar and use their local currencies for transactions.
The group of nations wants to “encourage the use of local currencies for economic and financial transactions.” The 10 nations that have decided to ditch the U.S. dollar are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
The move will help these countries to end their dependency on the U.S. dollar and significantly boost their native currencies. The declaration accepted by the ASEAN nations said that their goal is to strengthen bilateral and multilateral payment activities. Trading in local currencies would be faster, cheaper, and easier to close deals than the usage of the U.S. dollar.
The official declaration accepted by these 10 developing Eastern countries read, “We adopted the ASEAN Leaders Declaration on advancing regional payment connectivity and promoting local currency transaction to foster bilateral and multilateral payment connectivity arrangements to strengthen economic integration by enabling fast, seamless, and more affordable cross-border payments across the region.”
In conclusion, apart from BRICS countries, now ASEAN nations will move away from the U.S. dollar. It is reported that the Gulf Cooperation Council (GCC) is also planning to move in the same direction. Read here to know more details on why the oil-rich Gulf countries want to end the U.S. dollar’s dominance.
