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September has been another eventful month for the BRICS alliance.

With a recently expanded lineup of member countries that now includes Egypt, Iran, Saudi Arabia, Ethiopia and the United Arab Emirates, the block is said to be considering applications from a further 30 states. It is also exploring a potential ‘partner country’ model to allow non-members to collaborate without officially joining.

On September 24-25, the BRICS Energy Cooperation Summit took place in Moscow. Members discussed energy cooperation and development, including greater efficiency and digital transformation.

Yet, despite all of this, all eyes are on the BRICS Summit 2024. It will take place in Kazan in October and is set to reveal details about the future shape of the block and a potential gold-backed ‘BRICS Unit’ stablecoin.

Is the gold-backed BRICS currency real?

While the gold-backed BRICS currency is still speculative, the idea comes from official statements and hints by members.

For example, Russian Deputy Foreign Minister Sergei Ryabkov has spoken openly about the potential to use a gold-backed stablecoin to challenge U.S. dollar dominance.

Furthermore, moves by the Russian state, such as regulating stablecoins and offering excess energy to digital currency miners, hint that it is beginning to understand the technology’s potential use cases. Russia is also seeking alternatives after being excluded from SWIFT and becoming the world’s most sanctioned country.

So, while there has been no official announcement yet, there have been hints from some BRICS big-wigs. The upcoming summit in Kazan is expected to shed light on the matter.

Could BRICS rival the United States?

The U.S. dollar remains the world’s reserve currency, and no serious competitors exist. A total of 88% of global FX trades involve USD, it makes up 60% of all foreign currency reserves, and at least 80% of all global oil trade is conducted in it.

However, there is a clear trend toward de-dollarization among BRICS nations. For example, 60% of foreign currency reserves held in USD is down from 70% just a decade ago. That’s thanks in no small part to the U.S.-China trade war and the freezing of $300 billion of Russia’s reserves after it invaded Ukraine.

Clearly, the world is splitting into multiple spheres again, and many credible economists speculate that the era of globalization is changing. This will undoubtedly accelerate de-dollarization in the China-Russia-led sphere. Still, being so entrenched, and given that the United States and European Union alone make up close to 45% of global GDP, it’s unlikely that the USD will face any immediate threat from BRICS or its gold-backed currency.

That said, the Dutch Gilder and British Pound were dominant currencies in previous eras, and they all eventually fell out of favor. Expect de-dollarization to continue in BRICS nations in the long term. After the summit in October, CoinGeek will be back with more details on the BRICS unit.

Watch Spotlight On: Centi Franc—the truly stable stablecoin

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