In a recent video released by Sputnik, Russian President Vladimir Putin criticized the United States for abandoning the gold standard. The criticism is based on the country leaving the U.S. dollar as a trust-based currency backed by nothing.
According to the video translation shared by Jane Adams in a post on X, Putin stated:
“The United States decided to step away from the gold equivalent. There is no other promise, no other collateral rather than trust towards the U.S. economy.”
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The U.S. dollar dominance threatened by the BRICS
Notably, this statement comes amidst growing efforts by BRICS countries (Brazil, Russia, India, China, and South Africa) to develop an alternative payment platform that reduces reliance on the U.S. dollar. The initiative, born at the Johannesburg summit in 2023, aims to bolster trade and lending among BRICS nations using their currencies instead of the dollar.
Historically, the U.S. dollar has been the world’s reserve currency since the Bretton Woods system was established in 1944. Under this system, the dollar was pegged to gold, and other currencies were pegged to the dollar.
However, in 1971, President Richard Nixon ended the gold standard, effectively making the U.S. dollar a fiat currency backed by trust in the U.S. economy rather than a tangible asset like gold.
Russia, facing significant sanctions from the U.S. and its allies, is particularly keen on moving away from the dollar. President Putin recently highlighted that the ruble now accounts for 40% of Russia’s import and export transactions. Moreover, trade between Russia and China surged by 26% to $240 billion in 2023, with over 90% of settlements conducted in their national currencies.
Gold, silver, and cryptocurrencies as alternatives to the dollar
Commodities like gold, silver, and cryptocurrencies such as Bitcoin (BTC), Monero (XMR), Litecoin (LTC), Bitcoin Cash (BCH), MultiversX (EGLD), and Nano (XNO) have been proposed as alternatives to fiat currencies like the U.S. dollar.
These assets are not controlled by any single government or central bank and are often seen as a hedge against inflation and economic instability. Gold, in particular, has been a store of value for thousands of years and is still widely recognized as a reliable asset.
Nevertheless, despite the growing momentum behind de-dollarization efforts, analysts argue that replacing the dollar is no simple task. The dollar’s deep-rooted presence in the global financial system poses a formidable challenge to any attempts at de-dollarization. Some experts point to American dysfunction as the primary threat to the dollar’s supremacy rather than foreign efforts.
As the world closely monitors the BRICS nations’ efforts to establish an alternative payment platform, the U.S. must address its internal challenges and maintain the dollar’s global dominance. The upcoming BRICS meetings and the U.S. response will be crucial in shaping the future of the global financial landscape.
In a recent post on X, Gold Telegraph explained why “the foundation is shaking.” As posted, the era of a unipolar world is crumbling, giving way to the rise of a multipolar global order, and the U.S. dollar’s role in this new world remains uncertain.
