Can the BRICS Challenge the Dollar Hegemony? The Rise and Fall of the Dollar

The current global financial system is heavily dollar-dependent and relies on Western capital, institutions, and payment networks. Various countries are now combining to decrease dependence on this financial order, particularly in the United States. America’s use of its financial hegemony to impose sanctions is being questioned day-by-day, and with rising tension between the US and China the global financial system seems to split into independent yet strong networks, such as the BRICS alliance. Banks and financial institutions are trying to balance between interest or ideology-based geopolitical blocs, still hoping to stay interconnected in some ways.

Countries that previously had to issue government debt in American dollars can now do much of it in their own currencies, making themselves more resilient to the system’s recurrent volatility and crises. Can these emerging markets and financial systems replace – or at least challenge - the dominance of the dollar and American financial supremacy? Despite the extensive financial cooperation and increasing interconnectedness among BRICS countries, their activities in the world financial system have been underestimated. Yet, the stakes of BRICS' de-dollarization initiatives are particularly high.