‘USA is in decadence’, says promoter of de-dollarization in Brics

What is the risk that hegemony will simply be transferred from the dollar to the yuan?

From the point of view of Brazil and other countries, this transfer of hegemony would be, in a certain sense, like exchanging six for half a dozen. Another national currency would begin to perform international functions, which would bring problems similar to those we experience in the current dollar-centered system. But I don’t believe this is the most likely scenario.

China is reluctant to fully internationalize its currency. And that’s understandable. There would be certain prerequisites that China would have difficulty meeting. For example, would it accept giving full convertibility to the renminbi (the name of the yuan)? Would you accept removing the capital controls that you have successfully applied? It seems doubtful. Furthermore, the more widespread use of the Chinese currency as an international currency would lead to an increase in demand for it and would result, all else being equal, in exchange rate appreciation, with potential harm to China’s exports and its economic dynamism.

What risks does Brazil run if it reduces the dollar in its trade?

From an economic point of view, none. It would reduce exposure to secondary sanctions imposed by the US, which make it difficult for us to trade with sanctioned countries. It would reduce transaction costs by eliminating the need for intermediate conversion into the dollar. The risk would be eminently political: that of displeasing the USA. They are in decline, but they remain powerful and capable of wreaking havoc across the world.

Could the NDB be the key to a transition to a world with a smaller role for the dollar?