The fact that the dollar and the euro are the world’s reserve currencies allows both America and the EU to do 2 crucial things.
Firstly, whenever a country prints money (they don’t exactly, the money supply increases when banks give out loans. Countries can loosen lending requirements/costs), it acts as a tax on everyone holding the currency, because the value of products purchasable by that currency is spread over more currency.
Since everyone holds dollars and euros, American and European banks are able to tax the world. The same applies to their treasuries, which increase the money supply by running deficits (financed by borrowing from their central banks).
Secondly, these countries can sanction individuals, organisations and countries by cutting them off from exchange markets (as described by soviet entropy), and by cutting them off from the swift banking system (which is tech to transfer financial messages/transactions internationally).
These are the 2 fundamental tools of imperialism, and practically define it. The role of currency in empire is so important in fact that the first currencies were invented by ancient empires to tax subjects.
BRICS becomes an obstacle to the American and European empires by offering financial alternatives, and allowing countries to, if they choose so, to free themselves from imperial currencies. But this capability hasn’t been fully developed yet.
it depends on what you mean by BRICS, the EU, and imperialism.
Usually what people are referring to is the breakdown of something called Dollar Recycling and usually this gets lumped in with the specific way the US ruling class impose their economic will over the rest of the world.
Often people start with a history lesson beginning just after WWII, and I can link a video if you’d be interested, but in short:
- The US Dollar is used by all countries to settle trade. When countries buy and sell oil, they do it in US Dollars. When Argentina sells grain to Brazil, they do it using US Dollars.
spoiler
sidenote: It’s not actually “Argentina” or “Brazil” doing this. The businesses in these countries put in purchase requests for US Dollars at the Chicago Clearing House or some other bank, and then they pay a fee to exchange their currency for US Dollars, and then trade with each other, and then pay the bank to exchange it back.
sidenote 2: Sometimes these businesses go to their own country’s central banks to exchange the money so the central bank acts as a middle man of sorts..
-
If a business in the US wants to buy something from abroad, it can just do so without having to worry about where to get US Dollars from since it always uses US Dollars anyway. When French businesses, for example, wants to buy something from abroad, they has to first sell something to get the US Dollars they needs (often to the US) or they have to use a US bank or clearing house to exchange Euros for US Dollars.
-
Chinese businesses is becoming the largest trading partners of many countries, not the US ones anymore. So many countries can get US Dollars without having to sell to US businesses.
-
What is likely going to happen is that the BRICS countries (probably better referred to simply as the China Trading Block since all of the other countries are in a subservient role) will make their own crypto currency similar to Tether which is backed by US Dollars that China has in abundance.
-
This means that there is now a competing currency to the US Dollar but which can easily be exchanged for US Dollars without needing to use any US Banks at all. Thus the power the US businesses have will be weakened.
