The Future of Global Currency: BRICS, Ripple & Stellar Lumens Rumors, and the Decline of the Dollar

So here’s the thing: I believe the political season is the biggest distraction ever. Despite who wins, we are already seeing many countries in the eastern hemisphere move away from utilizing USD for cross-border payments and transactions.?

Since the U.S. Dollar is backed by debt rather than gold as it once was, our economy and native currency strength will continue to decline. As the world of finance evolves, blockchain technology and digital currencies are at the forefront of innovation. Inevitably, a new type of currency system will take the place of the U.S. Dollar.?

The rise of a new monetary system involving blockchain infrastructure, cryptocurrency, central bank digital currencies, stablecoins, etc., is on the horizon. Two seemingly key cryptocurrencies—Ripple’s XRP and Stellar Lumens (XLM)—are gaining attention for their potential to revolutionize cross-border payments, particularly as traditional financial systems face challenges. The rumors surrounding the potential of these solutions are at bullish Bitcoin levels pre-COVID.?

I’ll pay close attention to foreign and domestic countries and organizations using and adopting XRP, XLM, and related stablecoins and crypto solutions. Speaking about new monetary systems and coalitions to be aware of, the BRICS Nations are top of mind—the geopolitical shifts involving BRICS (Brazil, Russia, India, China, and South Africa) and their potential impact on the global economy are astronomical.?

I want readers to be aware of what may be coming their way. Pay attention to the world’s banking and financial systems. The Federal Reserve, Securities Exchange Commission (SEC), major banking institutions, and federal agencies within the U.S. are preparing to shift to a new world currency system. Don’t get caught lacking.?Follow the Money!

Origins of the Federal Reserve and Global Monetary Systems

The Federal Reserve was established in 1913 as the central banking system of the United States. Its role was to stabilize the financial system, manage inflation, and serve as a lender of last resort during crises. The U.S. dollar, backed by the strength of the American economy and controlled by the Federal Reserve, became the world’s reserve currency, especially after the end of the gold standard in 1971.

However, economic imbalances and increased U.S. debt have weakened the dollar’s dominance over the last few decades. Countries like those in BRICS are now exploring alternatives to the dollar to reduce their dependency on think tanks like the World Economic Forum, institutions like the World Bank and International Monetary Fund (IMF), to include foreign aid from Western nations to mitigate the risks of U.S. sanctions. This is where blockchain and digital assets like XRP and XLM enter the conversation.

BRICS and the Search for Alternatives to the Dollar

The BRICS nations have been actively working to challenge the U.S. dollar’s dominance. The group is considering launching a new reserve currency to facilitate trade and reduce reliance on the dollar for international transactions. Geopolitical and economic pressures primarily drive this shift as these nations seek more independence from Western financial institutions.

There is speculation that Ripple’s XRP or Stellar’s XLM could play a role in BRICS’ alternative financial infrastructure. Ripple’s focus on providing fast, low-cost cross-border payments and Stellar’s mission to promote financial inclusion make these digital currencies attractive for facilitating international trade among BRICS nations.

Ripple (XRP) and Stellar (XLM) in Global Financial Systems

Ripple’s XRP is designed to serve as a bridge currency for financial institutions, providing liquidity for cross-border payments and reducing the need for pre-funded nostro accounts. Stellar Lumens (XLM) has a similar mission but focuses more on individuals and smaller financial institutions, particularly in underserved markets.?

? XRP’s Adoption: XRP has been adopted by several large financial institutions. Notably, SBI Holdings in Japan has partnered with Ripple, and Santander and American Express are also using Ripple’s technology for international payments. Ripple’s fast settlement times and low costs appeal to banks looking to streamline their cross-border transactions.

? XLM’s Adoption: Stellar has gained traction through its partnerships with organizations like IBM and MoneyGram. IBM’s World Wire system, which uses Stellar for international payments, is being explored by banks worldwide. Stellar has also been involved with central banks, such as the Ukrainian government, to examine the development of a national digital currency.

The Declining Value of the U.S. Dollar

As BRICS nations look to reduce their reliance on the U.S. dollar, concerns over its future are growing. The Federal Reserve’s monetary policies, particularly the large-scale printing of money and low interest rates, have led to fears of inflation and the weakening of the dollar’s purchasing power. Countries and financial institutions seek alternatives, and digital currencies like XRP and XLM could fill the gap.

Suppose the value of the U.S. dollar continues to decline. In that case, it will lead to increased volatility in global markets, higher inflation, and changes in how countries trade and settle payments internationally. BRICS, in particular, may accelerate efforts to adopt alternative currencies or digital assets to maintain economic stability.

What Happens if Countries Adopt XRP and XLM?

If countries or blocs like BRICS were to adopt XRP or XLM on a large scale, the global financial landscape could change in several significant ways:

1. Faster, Cheaper Cross-Border Payments: Traditional cross-border payment systems, like SWIFT, are slow and expensive. Ripple’s XRP and Stellar’s XLM could allow for near-instant transactions at a fraction of the cost, making international trade more efficient. This would benefit countries with large remittance markets or those looking to increase trade with minimal friction.

2. Reduced Dependency on the U.S. Dollar: Using XRP or XLM as bridge currencies, nations could bypass the U.S. dollar in international trade, reducing exposure to fluctuations in U.S. monetary policy or sanctions. This would allow countries like those in BRICS to conduct trade more freely, leading to greater financial sovereignty.

3. Stabilization of Global Trade: For countries facing high inflation or currency instability, using a digital asset like XLM or XRP could help stabilize trade and preserve transaction value. Stellar, in particular, is designed to provide low-cost financial services to individuals and businesses, which could be critical for emerging economies.

4. Impacts on Central Bank Digital Currencies (CBDCs): Many countries are exploring Central Bank Digital Currencies (CBDCs) as part of their monetary policy. Ripple and Stellar’s blockchain infrastructures could potentially support these CBDCs, integrating them into a global payment network. Stellar’s partnership with Ukraine and Ripple’s work with central banks indicate that these platforms could be integral to future CBDC deployments.

Risks and Considerations for Readers

While the potential benefits of XRP and XLM adoption are promising, there are risks and uncertainties to consider:

? Regulatory Challenges: Ripple has faced legal challenges in the United States, with the SEC alleging that XRP is a security. Although the case is ongoing, it raises questions about the regulatory future of digital assets.

? Volatility: Cryptocurrencies are known for their price volatility, which could pose risks for countries or institutions using them for payments. Like Stellar’s integration of USDC, Stablecoins aim to mitigate this by providing a stable digital currency option.

? Global Competition: XRP and XLM are not the only solutions for cross-border payments. Competing blockchain projects, like Ethereum or Algorand, could emerge as preferred options for countries or financial institutions.?

TL;DR:

As the U.S. dollar faces increasing challenges and the world shifts toward digital solutions, XRP and XLM seem well-positioned to play a critical role in the future of cross-border payments. BRICS nations, in particular, are exploring alternatives that could reshape global finance and reduce reliance on traditional systems. While adopting these digital assets is still in its early stages, the potential for faster, cheaper, and more secure transactions could revolutionize how countries interact economically. However, the road to mass adoption comes with challenges, including regulatory hurdles and market competition, that must be navigated carefully. Remember that most of these processes are already done or ongoing during the American election cycle right under our noses. Suppose we don’t pay attention to where the money flows and diversify our currency/asset holdings. In that case, American citizens will be stuck holding the Trillion-dollar debt our country created when we officially switch to a new system.?

Read More:

Bambrough, B. (2024, October 22). Surprise Elon Musk endorsement suddenly sends Bitcoin and crypto prices higher. Forbes. https://www.forbes.com/sites/digital-assets/2024/10/21/surprise-elon-musk-endorsement-suddenly-sends-bitcoin-and-crypto-prices-higher/

BRICS/RUSSIA. (n.d.). Новости. Press conference following the 16th BRICS Summit. https://brics-russia2024.ru/news/press-konferentsiya-po-itogam-xvi-sammita-briks/

Desmond, M. (n.d.). Whoa, we’re half-way there: UCC Crypto-Overhaul Now adopted by 25 states. Kane Russell Coleman Logan PC. https://www.krcl.com/insights/whoa-were-half-way-there-ucc-crypto-overhaul-now-adopted-by-25-states

Hayes, A. (n.d.). Stablecoins: Definition, how they work, and types. Investopedia. https://www.investopedia.com/terms/s/stablecoin.asp

Insights, L. (2024, October 21). Fed governor Waller supportive of tokenization, stablecoins. Ledger Insights - blockchain for enterprise. https://www.ledgerinsights.com/fed-governor-waller-supportive-of-tokenization-stablecoins/

Money and payments: The U.S. dollar in the age of digital ... (n.d.-a). https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf

Sandor, K. (2024, October 15). Ripple Names Exchange Partners for Stablecoin RLUSD, awaits Nydfs approval. CoinDesk Latest Headlines RSS. https://www.coindesk.com/business/2024/10/15/ripple-names-exchange-partners-for-stablecoin-rlusd-awaits-nydfs-approval/?_gl=1%2A1p38sov%2A_up%2AMQ

Swift planning launch of New Central Bank Digital Currency Platform in 12-24 months | reuters. (n.d.-b). https://www.reuters.com/business/finance/swift-planning-launch-new-central-bank-digital-currency-platform-12-24-months-2024-03-25/

Председательство Российской Федерации в объединении БРИКС в 2024 году. (n.d.). https://brics-russia2024.ru/

Ripple. (2024). “Our Vision.” Retrieved from Ripple.

Stellar. (2024). “Stellar for Financial Institutions.” Retrieved from Stellar.