dedollarization Shake US Economy: Will BRICS Closer to a New Currency?

Russia and China have significantly reduced their reliance on the US dollar in bilateral trade, with over 90% of transactions now being conducted in their respective national currencies, the ruble and the yuan. This shift is part of a broader strategy of de-dollarization aimed at decreasing dependency on the US-led global financial system. Russian Prime Minister Mikhail Mishustin highlighted this achievement, indicating that it demonstrates almost complete de-dollarization of economic ties between the two nations. In 2023, trade between Russia and China saw a substantial increase, growing by 26% to reach $240 billion. This growth is partly attributed to the Western sanctions imposed on Russia following its invasion of Ukraine, which have pushed Moscow to seek closer economic ties with Beijing. In 2024, the trade volume further increased, setting a new record of $200 billion in transactions. Furthermore, Chinese banks operating in Russia have ceased processing trade settlements in dollars and euros, a move driven by new US sanctions. This shift to over-the-counter trading has complicated access to reliable pricing for the Russian currency. Additionally, the Moscow Exchange reported that the yuan became the most traded currency, surpassing the US dollar, with a significant portion of foreign currency trading now dominated by the yuan. These developments are part of a broader trend among BRICS nations to reduce reliance on the US dollar, with discussions about establishing a new BRICS currency to rival the greenback. While the US dollar remains dominant in global financial markets, the efforts by Russia and China represent a significant move towards diversifying their economic partnerships and strengthening their financial sovereignty.