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Nearly 20 more countries set to permanently ditch dollar in 2024

TL;DR

  • Nearly 20 countries are set to abandon the USD for native currencies in 2024.
  • BRICS bloc, including new members Saudi Arabia, UAE, Egypt, Iran, and Ethiopia, leads the de-dollarization effort.
  • 10 ASEAN countries and several from Africa and the Middle East are expected to join BRICS.

The global financial landscape is on the cusp of a seismic shift as nearly 20 countries are poised to abandon the U.S. dollar in favor of their native currencies for global trade in 2024. This move, spearheaded by the expanding influence of BRICS, marks a significant departure from the long-standing USD-dominated system.

BRICS Leads the Charge

The BRICS bloc, which has recently welcomed new members including Saudi Arabia, the United Arab Emirates, Egypt, Iran, and Ethiopia, is at the forefront of this transition. With its growing clout, BRICS is not only redefining global economic dynamics but also challenging the dollar’s hegemony in international trade. This year, an additional 16 countries are expected to join this de-dollarization mission, further bolstering BRICS’ position as a formidable global economic alliance.

Among the prospective new members are 10 ASEAN countries, namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. These nations have agreed to cease trading in the USD, opting instead for transactions in their native currencies. This move strengthens the ties between BRICS and ASEAN, collectively creating a formidable force in the global economic arena.

In addition to ASEAN members, several countries from Africa and the Middle East, including Pakistan, Iraq, Turkey, Nigeria, and Egypt, are poised to join BRICS. This expansion, expected to be a key agenda at the upcoming 16th BRICS summit, reflects a growing discontent with USD’s dominance and a collective push towards a more multipolar economic world order.

Declining Dominance

The USD has been the cornerstone of the international monetary system since World War II, serving as the primary reserve currency and the medium of exchange. However, in recent times, there has been a growing movement toward de-dollarization. This trend has been fueled by the desire to reduce reliance on the USD, which grants considerable power and advantage to the United States.

The dissatisfaction with USD’s supremacy is now more widespread than ever, encompassing regions like Southeast Asia, the Middle East, and Latin America. This shift is multi-faceted, impacting trade invoicing, foreign exchange reserves, financial clearance methods, and debt issuances. The move towards de-dollarization is reflective of a global aspiration for a new, more democratic international economic order.

However, it’s crucial to note that this shift does not imply the immediate demise of the dollar’s influence. Currently, there is no viable alternative to the dollar that can fulfill its role in the global economy. Yet, the disadvantages of overreliance on the dollar, especially for developing countries, are becoming increasingly apparent.

Economic Rationale Behind De-Dollarization

The trend towards de-dollarization is rooted in economic realities. One key concern is the mismatch between the U.S.’s shrinking share in the global economy and the dollar’s growing role in global finance. This discrepancy raises questions about global financial stability.

Another factor is the transfer of resources from the periphery to the United States through the dollar. The U.S. enjoys the privilege of earning significant returns on its foreign assets, while being able to afford a lifestyle beyond its GDP, thanks to the dollar’s supremacy. This phenomenon contributes to global economic imbalances and vulnerabilities for countries with persistent trade surpluses.

The de-dollarization movement also reflects concerns about the U.S. leveraging the currency for foreign policy objectives. The imposition of sanctions and the dominance of USD in international transactions have prompted countries to seek alternatives.

As 2024 unfolds, the trend towards de-dollarization appears unstoppable, with major developing countries leading the way. This shift signifies a move away from a unipolar world dominated by the USD towards a more multipolar economic landscape. The upcoming year is set to be a pivotal one in this global financial realignment, as nearly 20 more countries join the ranks of those seeking alternatives to the dollar, reshaping the future of global trade and finance.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Jai Hamid

Jai Hamid is a passionate writer with a keen interest in blockchain technology, the global economy, and literature. She dedicates most of her time to exploring the transformative potential of crypto and the dynamics of worldwide economic trends.

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