Ex-State Department Official Says BRICS-Led De-dollarization Should Alarm US

Former U.S. State Department official Thomas Hill warned that the expansion of the BRICS consortium could potentially speed up the global de-dollarization process, posing a significant concern for the U.S..

What Happened: The inclusion of new members in BRICS (Brazil, Russia, India, China, South Africa) may intensify the global shift away from the U.S. dollar, reported Business Insider.

Hill highlighted the potential issue in a piece for the Atlantic Council, emphasizing the addition of Egypt to the BRICS countries. He suggested that North African nations might become the most aggressive advocates for de-dollarization.

“It is clear that traditional US allies, such as Egypt, Saudi Arabia, and the UAE, are already exploring ways to de-dollarize and that Beijing is helping that process move forward,” he said.

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Why It Matters: The BRICS nations have been expressing plans to challenge the U.S. dollar’s dominance in the global financial circuit throughout this year.

The idea of a common BRICS currency was discussed earlier this year but was then dismissed. Yet the recent developments suggest that this idea might be revived, increasing the urgency for the US to address this issue

A notable example of this shift is India’s move to pay for its oil imports in rupees instead of dollars in September. This move by a BRICS nation indicates the increasing willingness of countries to move away from the dollar

Hill further warned that even a partial shift away from the dollar could weaken the reliance on the SWIFT finance mechanism, a tool used by the U.S. to impose sanctions. This could also affect the U.S.’s fiscal health and its ability to maintain large federal deficits and stable debt costs.

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Photo via Shutterstock


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Posted In: NewsEconomicsMarketsGeneralBRICSDe-DollarizationStories That MatterThomas Hill
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