Will the 2023 BRICS Summit idea of De-Dollarization be realized?

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This year South Africa’s Sandton Convention Center’s is a host for the highly anticipated 2023 BRICS Summit. Leading up to the summit, the idea of de-dollarization has become a highly popularised topic. One could say that the growing resistance toward the dollar is one that has contributed to academic discourse and polarized academic debates.

Satoshi Nakamoto’s Bitcoin, or Vitalik Buterin’s Ethereum were inventions that came as a result of the growing distrust in the global financial system. Prior to these technological remedies, academia has been riddled with  debates challenging the US dollar and its use of the fiat currency system.  De-dollarization has been a popular conjecture stemming from the frailties of the continued use and sovereignty of the dollar hegemony. 

In this opinion piece, I would like to extend the seminal contributions of Antonio Gramsci’s prison notebooks to analyze the persistent uncertainty that frames the global financial system. 

Antonio Gramsci’s Prison Notebooks, written from the confines of his prison cell, are a seminal contribution to Marxist literature. Gramsci wrote the prison notebooks in the context of Mousselini’s fascist government, following his politically fueled arrest and his involvement with the Italian communist party. In his cell, he contributed to one of the most widely used concepts in Marxist discourse, the Interregnum. 

Gramsci’s definition of the interregnum was a period in time in which the hegemonic force, which was Fascism, was facing an imminent displacement, although there was a lot of uncertainty surrounding the succession. Gramsci theorized that this period of time would result in the contestation of ideologies to replace the weakening hegemonic force. 

This idea of an interregnum is not only applied to Gramscian studies but can also be used as a theoretical lens for understanding global Geopolitics. The BRICS summit, which has been subject to global attention pertaining to the notion of de-dollarization may be a symptom of the imminent interregnum.

Will the 2023 BRICS Summit idea of De-Dollarization be realized?
The 2023 BRICS Summit.The 2023 BRICS Summit

The attitude towards the dollar has been a heavily contested area of study since the dollarization of the world following World War II’s Bretton Woods discussions. The precise reasons for the dollarization of the world remain a topic subject to numerous debates in academia. 

Felix Gerding and Jonathan Hartley corroborate the evidence surrounding the growing discontent with the world’s reserve currency. However, they argue in their paper, which is titled, “De-Dollarization? Not So Fast”, that the prevalent historical dominance of the US dollar, the prevailing presence of US hegemony remain entrenched due to the continued resilience shown historically in both recent de-dollarization efforts from countries such as Russia.

More recent conversations surrounding the de-dollarization agenda can be found among the BRICS nations at the 2023 BRICS Summit. Although realizing this agenda of dedollarization is a challenging feat due to how integral the dollar is to the global financial system. Changing the dollar is riddled with numerous equations worth solving, notably the prevalence of US dollar currencies in the global central banks.

Unless the BRICS nations find ways around the issue of US dollar reserves in the central banks, and the challenges of gaining trust in an alternative currency, US dominance may continue to persist. 

Academics have theorized the creation of a digital BRICS currency. The precise financial architecture remains unclear, but countries have, since 2020, experimented with pilot digital currencies. 

If the US is reliable, it would be odd to explore alternate currencies, but the US dollar’s hegemony is a threat. The dollar’s hegemony allows the US to systemically discipline insubordinate states with US state sanctions. In the case of the complex geopolitical dynamics of the Russian-Ukrainian War, the US’s transgressions with their progression in NATO remain unpoliced provocations. By merely citing the Cuban Missile Crisis, one can see the hypocrisy of this provocation of a military bloc’s encroachment on one’s borders. 

The issue of dollarization and the imposed trade embargoes with Russia are all instances of weoponized dollar use. The world could be  growing tired of this geopolitical bullying, hence the prevalent quest for alternative currencies.  Dr. John Taskinsoy explored this in 2019  by exploring the use of stable coins, Swift, and Crypto-currencies as a potential alternative to stablecoins. 

Antonio Gramsci’s infamous Interregnum, depicted a period of uncertainty in which the old hegemony’s demise was imminent, yet the succession trajectory remained unclear, and contentious. There are a plethora of possibilities, but what remains true is the Interregnum of uncertainty during this theorized demise of the US dollar. Maybe the dollar could survive, but the collectivization and expansion of BRICS countries warrant consideration, especially considering the sheer size of the economies that could potentially join the  growing BRICS geopolitical force.

The views expressed in this article are the author’s own and do not necessarily reflect Who Owns Africa’s editorial policy.
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