In 1971, United States shocked the world when President Nixon effectively ended the Bretton-Woods system by taking the dollar off the gold standard. The founders of the Bretton-Woods system, having just come out of the Great Depression, were insecure about financial markets—and gold was thought to be just the backbone needed to stave off another economic disaster.

Liberal economists such as Paul Krugman have argued that the Federal Reserve executed that move in order to keep the dollar as the primary currency trade note in the world, as has been the case. The American dollar has become the de facto fiat currency of the world—composing 61 percent of IMF currency holdings today.

But Nixon’s move had consequences: one immediate and one that remains consequential to this day. The first was the so-called “Nixon Shock,” where global markets reacted negatively to the news. The International Monetary Fund tired of ameliorating the “Nixon Shock” and stated that exchanges through the IMF may be done through any type of trade except gold—and so the world turned its eyes to oil just as prices began to skyrocket in the 1970s.

And so Western powers traded their gold hegemony for a different kind of hegemony grounded in the oil trade and the U.S. dollar, which went unchallenged for decades.

Now through multilateral cooperation by Brazil, Russia, India, China, and South Africa—the so-called BRICS countries—a new challenger titled the BRICS Development Bank has emerged to take on the international economic order.

Just as the Bretton-Woods system based currencies including the dollar on gold, the BRICS countries have developed a system where international investments and trade are based on power politics. This is important because the BRICS nations today account for much of the dollars invested in the oil trade today with trading partners in Eastern Europe, Middle Eastern partners of the Organization of Arab Petroleum Exporting Countries, or OAPEC, Indonesia, and Venezuela.

The simple move by BRICS is obviously a threat to the current order; the U.S. could lose its position as a major economic power in terms of the oil trade and the position of the dollar as a fiat currency—things it traded the Bretton-Woods system of gold hegemony for. The entire oil trade could be decentralized from dollars to local currencies, and with it, power would shift away from its current Western center.

King Faisal similarly shifted trade from dollars to local currencies in 1973 when Saudi Arabia ended oil supplies through OAPEC due to the Yom Kippur War, which pressured the U.S. to force Israel to pullout from Egypt. Of course, such actions are not sought as we live in an inter-connected world today where diplomacy at international forums such as the United Nations reigns. However, leverage is important, and the capability of the BRICS to pull off such a move is present. This can also gradually happen through its current system as well; buying the dollar, diluting it by cashing it out, and trading it for local currency for investment to clients in developing nations such as in Africa or South Asia.

The BRICS Development Bank was developed to support nations who have felt underrepresented in investment projects—an objective necessarily interlinked with the political actions. Much of the world is frustrated with the IMF—and the BRICS Development Bank will be a counter to policies that are frequently seen as out of touch and reincarnated tool of Western colonialism.

While the bank has not yet flexed its muscles, it certainly has the firepower to change the future of international economic development.

Parasaran Rangarajan studies at the Harvard Extension School. He is a consultant for the South Asia Analysis Group and editor-in-chief of the International Law Journal of London.