Venezuelan President Nicolas Maduro has urged for the de-dollarization of the global economy, citing the difficulties that the current dollar-dominated system imposes on emerging countries affected by U.S. sanctions. The call was made during Venezuela’s participation in the recent BRICS summit held in Johannesburg, South Africa.
A push for financial independence
Maduro’s message to the BRICS leaders—comprising Brazil, Russia, India, China, and South Africa—emphasized the need for alternative settlement systems that use national currencies. He argued that the “indiscriminate use and abuse of the U.S. dollar” serves as a tool for economic warfare against various nations. The Venezuelan leader proposed the creation of a new financial architecture that would allow transactions to occur through both physical and digital means in multiple national currencies. He also mentioned a basket of currencies as one of the tools to achieve this objective.
Venezuela’s struggle and global impact
Venezuela has faced economic sanctions that have caused significant harm to its state-owned oil company, PDVSA, and also prevented U.S. citizens from financing or acquiring Venezuela’s cryptocurrency asset, known as Petro. Maduro believes that such sanctions are unjust and have negatively impacted around 28% of the world’s population across 30 different nations. He believes that the sanctions have harmed both human rights and economic development. In an effort to counteract this, Maduro has suggested that Venezuela’s experience in dealing with the effects of sanctions could be helpful to the BRICS bloc. He hopes to work towards dismantling the current financial and commercial domination system.
On August 1, Venezuela applied to join the BRICS group. However, it was not selected as one of the six new nations invited to join starting next year. Despite this, President Maduro believes that Venezuela, with the world’s largest oil resources, could make a significant contribution to a “global integration model.”
As nations grapple with the complexities of a dollar-dominated global economy, Maduro’s call for de-dollarization adds another layer to the ongoing debate about financial sovereignty and geopolitical influence. While Venezuela’s bid for BRICS membership was not successful, the country’s push for alternative financial systems could resonate with other nations seeking to reduce their dependence on the U.S. dollar. This move may also align with BRICS countries’ own ambitions to end dollar dependence, potentially setting the stage for significant shifts in the global financial landscape.