The New Development Bank (NDB), established by the BRICS nations, is actively pursuing a strategy of de-dollarization to reduce dependence on the US dollar and promote a more multipolar international financial system. A key element of this strategy is the introduction of local currency lending arrangements. The NDB leadership recognizes the advantages of lending in local currencies like the Rand and the Brazilian Real. By doing so, member countries can shield themselves from foreign exchange risks and the fluctuations in US interest rates, which are typically associated with borrowing in dollars.
This move by the NDB underscores a broader aspiration: the creation of a common currency framework for trade and investment. Such an initiative aims to reduce vulnerability to the US dollar's influence in global finance. The ultimate goal is to establish a more multipolar financial system, challenging the prevailing unipolar system currently dominated by the US dollar.
The efforts of the NDB reflect a growing trend towards de-dollarization in international finance. As more institutions and nations explore alternatives to the dollar in their transactions and reserves, it suggests that the shift toward a multipolar financial system may indeed be gaining momentum.
As the U.S. continues its efforts to counter the increasing influence of cryptocurrencies and digital assets, it inadvertently creates opportunities for other currencies to strengthen. Conversely, had the U.S. embraced an open, transparent, and efficient dialogue regarding the evolution of the cryptocurrency market, the nation could have stood to benefit significantly by attracting even more capital inflow.