Russia promotes the possibility of the BRICS nations creating a new currency
According to a top Russian official, the BRICS nations — Brazil, Russia, India, China, and South Africa — are working on developing their own currency.
As economic powerhouses increase their efforts to distance themselves from US dollar hegemony, a new global order may emerge.
A senior Russian official, according to reports, has stated that the BRICS alliance is working on developing its own currency. The acronym BRICS refers to five major rising economies: Brazil, Russia, India, China, and South Africa.
According to local media, State Duma Deputy Chairman Alexander Babakov made the remarks at the St. Petersburg International Economic Forum gathering in New Delhi, India.
Babakov allegedly emphasised the importance of both countries working towards a new payment medium, adding that digital payments could be the most promising and viable option.
He also stated that the currency may help China and other BRICS members rather than the West.
“Its composition should be based on the incorporation of new monetary ties based on a strategy that does not defend the US dollar or euro, but rather forms a new currency capable of benefiting our shared objectives.”
According to reports, Babakov also proposed that the new money would be backed by gold and other commodities such as rare-earth elements.
This week, former Goldman Sachs chief economist Jim O’Neill urged the BRICS bloc to grow and challenge the dollar’s supremacy. He stated in a paper published in the journal Global Policy that “the US dollar plays a far too dominant role in global finance.”
A BRICS money is not a novel idea. A source revealed in 2019 that the bloc’s members were discussing the creation of a new digital currency for a unified payments system.
In a related move, China and Brazil agreed to trade in their respective currencies this week. The removal of the US dollar as an intermediary allows both countries to further separate themselves from the world’s reserve currency.
According to reports, the deal will allow China and Latin America’s largest economy, Brazil, to conduct direct trade and financial transactions. Instead of going through the greenback, Chinese yuan will be exchanged immediately for Brazilian reals and vice versa.
China is pushing forwards with its central bank digital currency project, and crypto adoption in Brazil is increasing after the country legalised it as a payment method late last year. Meanwhile, the US government is determined to continue its war on cryptocurrency, even as financial regulators tighten the screws on the fledgling sector.