So…the US dollar is the world’s “reserve currency”. Most international trade is actually conducted in USD, and central banks have to hold billions of USD in reserve as part of their basic operations.

This gives the US two massive geopolitical advantages:

• Because central banks like to hold their reserves in US Treasury bonds (which are considered safe but also pay interest) it artificially lowers the interest rate on those bonds. It’s estimated this saves the US hundreds of billions of dollars annually in borrowing costs.

• Unless you want to use literal truckloads of cash, the only way to obtain and hold USD is through the global dollar-denominated banking system, which itself MUST comply with US sanctions. In practice this means that the US can “sanction” individuals, companies and countries - and thus nearly freeze them out of global trade and finance.

I think it’s best to see BRICS as a direct response to that reality. The more these countries trade with each other in their own currencies, the more they weaken “dollar supremacy”.

Over time, (20 years?) I personally would predict that the effectiveness of the US sanctions will degrade to the point of irrelevance. You can already see this (IMO) in the “chip wars” and Huawei’s “escape”. I think the proportion of global trade denominated in dollars will steadily decline, and borrowing costs will start to normalize to the rest of the world, and possibly spike.