The BRICS has expanded its membership and there were enough indications, when BRICS Leader’s Summit ended on August 24 that the new BRICS currency will emerge in the year ahead. The world is at a crossroad due to several geo-political reasons. As all current and prospective BRICS members and members of the Shanghai Cooperation Organization and the Eurasian Economic Union are suffering from the weaponization of the U.S. dollar, it is the need of the hour. Also the Ukraine-Russia conflict has brought the issue at the forefront.
The recently concluded Summit took a momentous decision and expanded its membership for the first time since 2010. Egypt, Argentina, Saudi Arabia, the United Arab Emirates, Ethiopia, and Iran were all admitted to membership effective January 1, 2024. The BRICS are now BRICS+ with eleven full members and on their way to greater political power and a new currency union. With the additions of Saudi Arabia, Iran and UAE, the BRICS have now effectively surrounded the Persian Gulf. With the addition of Egypt and Saudi Arabia, they now effectively control the Red Sea and the Suez Canal. Meanwhile, the addition of Argentina gives BRICS control of the Straits of Magellan for transit from the Atlantic to the Pacific Oceans. The close-knit family has bigger scope to experiment.
These days most of the nations are worried with the power of US dollar. They fear that their dollar-denominated reserves may be frozen by the U.S., as recently happened to Russia. And to overcome this lingering fear the only solution is to start a new currency union big enough to offer a diverse range of goods and services that bypasses the dollar. It seems the process is getting underway. The expanded membership makes the new currency more feasible.
Expanded BRICS membership also marks the beginning of the end of the petro-dollar era. Membership of Saudi Arabia in the BRICS is a large step in that direction.
This is why the admission of new members and the launch of a new currency cannot be viewed in isolation.