China and Brazil agree to ditch US dollar for trade

China and Brazil have reached a deal that would allow the two nations to conduct trade directly using their own currencies, doing away with US dollars as an intermediary.

The agreement was originally penned in January, but only made official on Wednesday following a business forum in Beijing between the two nations, which boast the largest and strongest economies in their respective regions.



According to the Straits Times, transactions in both Yuan and Real will be executed by the Industrial and Commercial Bank of China and Brazil's Bank of Communications BBM.

"The expectation is that this will reduce costs," and "promote even greater bilateral trade and facilitate investment," the Brazilian Trade and Investment Promotion Agency said in a statement.

China currently has a number of similar agreements with countries such as Pakistan and Russia, however, the authoritarian regime headed by Xi Jinping has been making moves in other parts of the world as well. 

Wednesday's news comes on the heels of China's first-ever Yuan-settled oil trade as well as reports that Saudi Arabia is ramping up investment in the region, all of which have led to speculation that these nations are attempting to dethrone the US dollar as the default global currency.

The US dollar has gone through turbulent times as of late. In January, Human Events' Jack Posobiec warned of the impending collapse, suggesting that Saudi Arabia, Russia, Iran, and China could make it happen if they collectively stopped trading in American currency. 

According to US Global Investors, however, the US dollar still has a firm hold on first place, and any change will likely take a long time to take shape.