BRICS make good on their word to ditch the US Dollar – The $2B Copper mega-deal


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  • China is persuading African nations to use the Chinese Yuan instead of the US dollar for cross-border transactions as it moves to expand the BRICS alliance.
  • Zambia exports raw and processed copper to China each year for $2 billion. China is pushing de-dollarization by encouraging Zambia to pay for copper using the Yuan. 
  • China has been instrumental in promoting the de-dollarization movement across many developing countries, including those in Africa. 

The BRICS nations—Brazil, Russia, India, China, and South Africa—have recently taken bold steps to fulfill their commitment to reducing dependence on the US Dollar. This strategic move comes to the forefront as these emerging economies embark on a groundbreaking $2 billion copper mega-deal, one to be settled in Chinese Yuan.

The decision to shift away from the US Dollar reflects the BRICS nations’ collective pursuit of greater financial autonomy and reduced vulnerability to the fluctuations of a single currency. 

BRICS ditch the Dollar for Chinese Yuan in $2B Copper mega-deal

China, a BRICS member, is encouraging African nations to abandon the US dollar in favor of transacting in Chinese Yuan. The Bank of China’s office in Zambia is attempting to expand Chinese Yuan trade in Southern Africa. 

Zambia is Africa’s second-largest copper producer, and China is the world’s largest copper consumer. As a result, BRICS member China is attempting to profit from international copper commerce by forcing Zambia to use the Chinese Yuan rather than the US dollar.

Zambia is an annual exporter of refined and unrefined copper to China, with the value of this commerce exceeding $2 billion. The African nation supplies China with refined copper valued at $340 million in addition to unprocessed copper worth $1.64 billion. 

Copper accounts for 70% of Zambia’s total foreign export revenues and significantly contributes to the country’s GDP growth. China, a BRICS nation, is advocating for the de-dollarization discourse by encouraging Zambia to exchange copper for the Chinese Yuan rather than the United States dollar. 

We will earnestly act upon our responsibility and leverage our role in Zambia to support other African countries to provide holistic services and products related to RMB and to promote the use of RMB in bilateral trade and economic activities.

Lin Jingzhen, the bank’s vice president

The BRICS nation possesses a strategic advantage in persuading Zambia due to its control over the supply chain interests in Africa. If Zambia were to endorse China’s offer, copper transactions totaling $2 billion would be resolved in Chinese Yuan rather than US dollars, marking a significant milestone.

China focuses its BRICS strategy on Africa

China has actively supported the de-dollarization movement, which aims to decrease countries’ reliance on the US dollar. However, it is important to note that Beijing also maintains a significant supply-chain stake in Africa.

China is the largest consumer of copper in the world, and Zambia is the second-largest copper producer in Africa and the seventh-largest in the world.

Copper additionally constitutes 70% of Zambia’s foreign export earnings, and the country’s economy has been in a precarious state since the pandemic. This year, the kwacha has depreciated to an all-time low due to high inflation. China assisted the nation in June in reaching an agreement to restructure $6.3 billion in foreign government debt.

Additionally, China has been a driving force behind the de-dollarization movement in other African nations. For the first time this year, Egypt issued “panda bonds” denominated in yuan.

In addition, China has established numerous currency exchange agreements with nations such as Saudi Arabia and Argentina, thereby promoting the renminbi’s use internationally.

China continues to lead the BRICS bloc in its aggressive pursuit of the de-dollarization initiative. BRICS seeks to supplant the United States dollar as the global reserve currency with one of its member states’ currencies. 

The action would enhance the prospects of local currencies and bolster their respective domestic economies. In the immediate future, the dollar will be hardest hit if this scenario materializes.

If BRICS adopts local currencies instead of the US dollar, 10 financial sectors in the US will be impacted. Among the industries, are Global Financial System Banking and Finance, Energy and Commodity Markets, International Trade and Investment, Capital Markets, Consumer Goods and Retail, Production and Consumption, Technology and Fintech, and lastly Government and Policy

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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Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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