In a first-of-its-kind move, India and the United Arab Emirates have completed a crude oil transaction that bypassed the US dollar entirely, utilizing XRP as the intermediary, facilitated by the XRP Ledger System.
First it was a wild theory. Now it’s reality.
The BRICS nations, which now include the UAE following its membership expansion in 2024, wants to reduce their reliance on the US dollar, and this move is an important part of this process.
The primary motivation behind this move is the desire for economic autonomy.
For decades, the US dollar has dominated global finance, but recent geopolitical conflicts and sanctions have caused many countries to reconsider their dependence on the American currency, and even the reliability of the USA.
Ripple, the company behind XRP, has strategically partnered with the Dubai International Financial Centre to boost innovation in the digital finance sector.
Ripple’s CEO, Brad Garlinghouse, highlighted the significance of the UAE’s regulatory environment, stating that the UAE is one of the most advanced jurisdictions globally when it comes to offering regulatory clarity for licensed firms to offer virtual asset services.
Considering the regulatory sh*tshow what Ripple have to endure in the USA, Garlinghouse knows exactly what are he talking about.
De-dollarization intensifies
For decades, the US dollar has held a dominant position in global finance, but its influence is beginning to wane.
The United States’ rulers has increasingly used its financial systems as tools of political leverage, imposing sanctions on countries like Russia and Iran.
This has led many nations, particularly within the BRICS alliance, to seek alternatives to the dollar.
Russian President Vladimir Putin has described the decline of the dollar’s dominance as already irreversible and noted that the shift is gaining pace.
Within the BRICS nations, there is a growing trend to conduct trade using local currencies rather than the dollar.
Brazilian President Luiz Inácio Lula da Silva has openly questioned the necessity of the dollar in international trade, a sentiment echoed by many other BRICS leaders.
A new currency to replace the USD?
There is also ongoing discussion about creating a brand new BRICS currency that could be used for trade among member nations, effectively bypassing the dollar altogether.
While this idea holds seroius appeal, the path to its realization is paved with challenges.
The BRICS nations have pretty diverse economic conditions, and establishing a unified monetary system would require overcoming huge obstacles.
