A report has recently surfaced suggesting that BRICS nations, led by China and Russia, are accumulating vast amounts of gold with the intention of using it to back a new currency that aims to challenge the dominance of the U.S. dollar. This speculation has been put forward by Daniel McCarthy, a strategist at DailyFX.com, who believes that the hoarding of gold by these countries could signal a strategic move to weaken the position of the dollar.
McCarthy specifically points to China as a primary player in this gold accumulation. He highlights that every ounce of gold produced in Australia, one of the world’s largest gold-producing regions, is being shipped to China. McCarthy believes that similar actions have been observed in other BRICS member countries, indicating a coordinated effort. The recent BRICS summit, held in August, further supported this theory, as it welcomed six new members, including oil-producing countries like Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE. This has led to speculation that these countries are preparing to abandon the use of the U.S. dollar in the oil industry.
China and Russia, both major producers of gold, have been stockpiling the precious metal. McCarthy suggests that the increased hoarding of gold by these nations could have an impact on its price in the international market. Currently, gold is trading at around $1,920 per ounce, but as these countries continue to accelerate their purchases, gold prices may start to rise.
Russia is set to assume the BRICS chairmanship on January 1, 2024, ahead of the October 2024 summit. Experts predict that during this summit, the bloc may announce the launch of a new currency. While many assume that the BRICS nations will launch their own currency, there is also speculation that they might consider leveraging an existing payment system to settle international transfers. One such payment platform is Ripple, known for its cryptocurrency XRP. The Ripple XRP Ledger could be used by BRICS countries to tokenize physical assets and even introduce a Central Bank Digital Currency (CBDC). Ripple has already developed a CBDC platform that allows central banks, governments, and financial institutions to issue their own digital currencies.
This potential adoption of Ripple’s XRP as a bridge currency for the BRICS nations could have significant implications for the price and adoption of XRP. By utilizing Ripple’s technology, the BRICS bloc could drive utility and mass adoption of XRP, which could result in a substantial price increase for the cryptocurrency.
It is important to note, however, that while these speculations and theories suggest a potential challenge to the dominance of the U.S. dollar, there have been numerous attempts in the past to challenge the dollar’s position, all of which have ultimately failed. Nevertheless, the coordinated efforts of the BRICS nations present the largest threat to the dollar’s hegemony in its history.
In conclusion, the speculation surrounding the hoarding of gold by BRICS nations, particularly China and Russia, and their potential plans to challenge the U.S. dollar is gaining traction. The BRICS bloc is expected to announce the launch of a new currency, and there is speculation that they may consider leveraging Ripple’s XRP as a bridge currency. While the outcome of these developments remains uncertain, the potential implications for the international financial system and the cryptocurrency market are significant.
