Countries will gather at the Johannesburg summit from 22 to 24 August 2023 to underline the BRICS' goal of establishing itself as a major new economic force. This meeting will take place at a time of heightened tensions between the United States and China, so the BRICS could become a counterweight to the United States and the European Union.

So is the introduction of a new currency or a new gold standard the way to counter the hegemony of the US dollar? It is important to know what the BRICS are and what their intentions are if they are to position themselves on a new geopolitical chessboard.

What is the BRICS Alliance ?

The acronym BRICS stands for the confluence of four vast territorial nations: Brazil, Russia, India and China, joined in 2011 by South Africa. Since 2011, the BRICS members have held annual summits, alternating between the 5 founding states.

The aim of these summits is to reaffirm the importance of these countries on the international stage. 

In addition, the main aim of this alliance is to underline their economic and political importance, particularly in relation to other countries and especially the United States and the European Union.

What are the strengths of the BRICS ?

The liberation of the main emerging economies could be one of the most important geopolitical and economic developments of the next few decades. 

Similarly, the robustness and intensity of trade within the BRICS could be enhanced by the creation of new currencies. Russia has also said that the BRICS are developing a new reserve currency based on a basket of currencies.

Economists also see this new currency proposal as an opportunity for the BRICS to de-dollarise, thereby freeing themselves from the United States and the West more generally. 

The task of this coalition (and their potential members) is to remove the perception of the hegemony of the US dollar over the IMF. The aim is to enable the BRICS to build their own spheres of influence and a monetary unit within the money market.

A gold-backed currency to challenge the dollar

The gold standard has been the basic currency for the last two centuries. It was the organisation of the international exchange rate system that limited the exchange of currencies and gold to settle the balance of payments. 
In 1933, to combat the Depression, Washington abolished dollar-gold convertibility and created the dollar zone. Through various transitions, this provision was imposed on all the United States' allies and partners.

Today, to get out of this situation, the BRICS are calling for a return to the gold standard. At the last BRICS meeting, Russia expressed its full support for the project. But this will not happen simply by returning to the gold standard. It will involve the introduction of the "oil yuan", which China will use to value its activity on the oil market.

However, this can be converted into gold : China is the world's largest importer of oil, so the petroyuan zone can easily compete with the petrodollar. What's more, China is also the world's largest producer of yellow metal.

In any case, the idea of a common currency for the BRICS countries has been circulating for months. According to economic experts, it would only take a few days for the project to become a reality.
It is a currency backed by gold that could threaten the dollar's position as a global reserve. Experts believe that the gold standard will be of great benefit to the international currency. 

There is every indication that the introduction of this new currency could wreak havoc on the global money market.

Consequently, the BRICS countries, pioneers of de-dollarisation, have long expressed a desire to do away with the dollar. This union will therefore reshuffle the deck and rely on this currency to build a new world economic order.