In the midst of growing interest among Southeast Asian nations in BRICS, Zambia has made headlines by opting out of the US Dollar, enforcing penalties including potential jail terms for the use of foreign currencies.
BRICS has announced plans to introduce a new currency possibly backed by gold this year, although Bitcoin has been hailed by experts as a viable alternative. The alliance, which aims to reduce dependency on the US Dollar and strengthen economic ties among developing countries, has seen Zambia take a decisive step in abandoning foreign currencies. The Zambian government has issued warnings that individuals caught using the Dollar could face up to ten years in prison, as outlined in a draft document from the Bank of Zambia. This move is part of efforts to stabilize the country’s local currency amid economic challenges.
Recently, former Zambian President Thabo Mbeki has advocated for reducing reliance on the Dollar in international trade, citing examples where countries successfully conduct transactions using their national reserves without the Dollar’s involvement.
This shift reflects a broader trend seen in countries like China, Russia, the UAE, and others, who increasingly prefer to use their national currencies for international transactions. This trend has contributed to a decline in the Dollar’s global dominance, prompting concerns from institutions like the IMF about its future as a trade currency and reserve asset.
As countries pivot away from the Dollar, BRICS has emerged as a significant player. Originally composed of Brazil, Russia, India, China, and South Africa, the alliance has expanded to include Egypt, Ethiopia, Iran, and the United Arab Emirates, with ongoing discussions for additional members, including potential entrants from Southeast Asia such as Malaysia and Thailand.
Piti Srisangam, Executive Director of the ASEAN Foundation, sees membership in BRICS as a gateway to enhanced trade and investment opportunities for Southeast Asian nations, underscoring its strategic appeal.
Looking ahead, Russia is set to host the next BRICS conference, where discussions may include the launch of a new payment system and currency backed by member countries’ gold reserves. While speculation about a gold-backed currency persists, proponents within the crypto community advocate for Bitcoin’s adoption within the alliance, arguing its superiority over gold and potential benefits for a streamlined payment system.
In summary, Zambia’s bold move away from the Dollar aligns with broader shifts in global economics, where regional alliances like BRICS play a pivotal role in reshaping international trade dynamics and monetary policies.