The argument to de-dollarise the Rand is once again under the spotlight in 2025. Member countries of the BRICS+ trading bloc, of which South Africa is a founding member, have lofty ideals of establishing their own currency.
Primarily, this was conceived to counter the dominance of the US Dollar and Euro as de-facto currencies for cross-border trade. Now, with the US currency’s weakening and general concern about America’s financial health, is now the time to de-dollarise the Rand?
DE-DOLLARISE THE RAND
Globally, there is increased uncertainty due to US President Trump’s on-going trade wars, reports Daily Investor. As such, investors are shying away from traditional safe havens like US Treasury bonds.
Meanwhile, the creation of a BRICS-backed trading currency featured prominently at the bloc’s 2024 Summit in Kazan, Russia. Moreover, Russian President Vladimir Putin, appeared on stage holding a prototype of the banknote, dubbed the ‘Unit’, reports The Citizen.
WEAPONISE AGAINST THE DOLLAR
As The South African reported back in 2023, the new currency’s goal was always to ‘weaponise’ against the US Dollar as a currency for international trade, rhetorically speaking. Breaking away from the US-dominated SWIFT (Society for Worldwide Interbank Financial Telecommunications) financial system would be difficult.
However, a reserve currency, backed by gold and a basket of BRICS+ currencies could be administered through the New Development Bank (NDB). And this would be a viable way to de-dollarise the Rand and exorcise the impact of 30% Trump tariffs.
REACTION IN BRICS MARKETS
All seemed rosy until, ironically enough, US President Donald Trump was inaugurated into the Whitehouse in January 2025. The Chinese Yuan, Russian Ruble, Brazilian Real, Indian Rupee and SA Rand depreciated overnight. This once again underscored the power the US Dollar holds in global finance.
As such, the US Dollar continues to dominate the global financial system, used in more than 85% of currency trades. It also comprises nearly 60% of all central bank reserves, according to the Atlantic Alliance. Furthermore, President Trump’s ongoing trade disputes with China, Russia, Brazil and South Africa are clearly a test of the BRICS+ bloc’s economic resilience.
THE HARD WORK STARTS NOW
Therefore, if BRICS+ members are serious, they should move away from the sensationalist headlines. And rather begin the less glamorous and more practical tasks of building infrastructure to promote systems for financial and trade independence.
A strategy should be put in place that lays the groundwork for autonomy rather than attempting to topple the US Dollar overnight. This lofty ambition, if realised, would represent the most meaningful step toward a multi-polar world in the last century … with or without a shared banknote.
SHOULD SOUTH AFRICA WORK TO DE-DOLLARISE THE RAND?
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1.
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