This year has been dominated by headlines regarding the depreciating US dollar and the growing prominence of BRICS countries. Furthermore, as the GDP of the BRICS countries has already surpassed the G7 countries in terms of purchasing power parity, the recent de-dollarization efforts of the BRICS countries could pave the way for the mass adoption of Bitcoin.
The group of countries represented by Brazil, Russia, India, China and South Africa have been determined to develop a new global reserve currency. In contrast, when the New Development Bank of BRICS is working hard, can the fading dominance of the greenback finally push Bitcoin into the spotlight?
The process of de-dollarization
The first requirement for BRICS countries to pave the way for Bitcoin adoption will be de-dollarization. Decades ago, the US positioned itself to maintain dollar dominance on the international stage. Then, positioning the dollar as the global reserve is now through Richard Nixon and deals made decades ago.
Now, sanctions against Russia after the war Ukraine poses a global pre-choice. Furthermore, many countries had to decide how to deal with those sanctions if they wanted to deal with Russia, giving the BRICS collective an opportunity to emerge.
Therefore, de-dollarization is already a plan that many countries are currently working towards. Specifically, the BRICS collective has been looking for ways to usurp the power of the US dollar. This action, if deemed accomplished, could create an opportunity in which the purchase of gold reserves and the gold standard becomes extremely important.
With the U.S. dollar dwindling and the growing relevance of a host of different currencies, gold could become a truly essential asset. Moreover, if the dollar’s strength continues to weaken, it will spell disaster for the US. Specifically, a catastrophe caused by inflation and the reduction of the strength of the US currency. A disaster can be solved with a different monetary system.
See more: Global reserves in US dollars have fallen below 50%
Bitcoin adoption potential
The declining strength of the US dollar is currently coinciding with the increasing strength of the Bitcoin. Therefore, if that practice continues, in the face of strong international de-dollarization, Bitcoin could see mass adoption.
Bitcoin is a well-known and growing digital currency. Also, since the dollar can depreciate, digital assets will be an opportunity for everyone. Bitcoin and its technology would be a perfect safety net for individuals fearful of the devaluation of the local currency in the US.
The de-dollarization efforts of the BRICS countries could theoretically provide a path to mass Bitcoin adoption. Cryptocurrencies are only in the infancy of this development, as many expect the greenback to remain relevant for a while. However, the US dollar is considered one of the The most depreciating coins in 2023with a rapid decline so far.
Only time will tell, but the trajectory of both assets and global economic factors presents an interesting direction. Also, how countries are reacting and whether Bitcoin can withstand digital currency alternatives CBDC potentially from governments or not will be interesting.
The de-dollarization and relative strength of Bitcoin present an intriguing dichotomy.
See also: Circle CEO calls on the US to launch a digital dollar project