In the wake of growing interest from Southeast Asian nations, Zambia has taken a bold step by abandoning the US Dollar, with severe penalties announced for its use.
BRICS, a coalition of major economies, has outlined plans to introduce a new currency possibly backed by gold this year, although Bitcoin has also been touted as a potential replacement.
The global spotlight on BRICS has intensified, particularly among developing nations seeking to diminish reliance on the US Dollar and forge stronger alliances. One notable move from Africa involves Zambia, which has declared its intent to shun the Dollar and other foreign currencies, threatening up to a decade of imprisonment for anyone caught using them.
A preliminary document from the Bank of Zambia warns of strict repercussions for using foreign currency in local transactions, aiming to stabilize the national currency amid economic challenges.
Breaking: Zambia introduces strict penalties including up to 10 years in prison for individuals caught using the US Dollar and other foreign currencies. pic.twitter.com/2MDbjAFYhj — BRICS News (@BRICSinfo) July 3, 2024
Similar to many BRICS nations, Zambia has questioned the Dollar’s role as a dominant trading currency. Former Zambian President Thabo Mbeki, a leading advocate, pointed out that two countries successfully conducted transactions without the Dollar, relying instead on their national reserves.
This paradigm shift is gaining momentum, with countries like China, Russia, and the UAE preferring to conduct international trade in their own currencies. Consequently, the Dollar’s global influence has waned significantly, prompting concerns even from the IMF about its future as a trade currency and reserve.
As nations increasingly pivot away from the US Dollar, BRICS has emerged as a formidable alternative. Comprising major economies and rapidly growing markets, the alliance seeks to challenge the economic dominance of Western powers like the US and Europe. Initially composed of Brazil, Russia, India, China, and South Africa, BRICS has expanded to include Egypt, Ethiopia, Iran, and the United Arab Emirates, with ongoing discussions for additional members.
Southeast Asian nations such as Malaysia and Thailand have expressed interest in joining BRICS, viewing membership as a gateway to enhanced trade and investment opportunities.
“Membership in BRICS would unlock substantial trade and investment prospects, so the rationale is clear,” remarked Piti Srisangam, Executive Director of the ASEAN Foundation, in an interview with DW.
These developments precede Russia’s upcoming BRICS summit, a pivotal event where the alliance may unveil its new payment system and currency. Speculation suggests the currency could be gold-backed, though advocates for Bitcoin argue its superiority over gold, advocating for BRICS to embrace the cryptocurrency and bypass traditional payment systems.
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