Russia promotes BRICS currency creation

BRICS currencies exist. The group considered introducing a new digital currency for a unified payment system in 2019.

Russia promotes BRICS currency creation

As economic powerhouses continue their attempts to remove themselves from the dominance of the US currency, a new world order may be forming.

A senior Russian official has reportedly stated that the BRICS alliance is planning to create its own currency. The abbreviation BRICS refers to the five main emerging economies of Brazil, Russia, India, China, and South Africa.

According to local sources, State Duma Vice Chairman Alexander Babakov made the remarks during the St. Petersburg International Economic Conference in New Delhi, India.

Babakov reportedly emphasized the significance of both nations working toward a new payment medium, noting that digital payments may be the most promising and realistic option.

He said that the currency might be advantageous to China and other BRICS nations, but not to the West.

“Its composition should be based on inducting new monetary ties established on a strategy that does not defend the U.S.’s dollar or euro, but rather forms a new currency competent of benefiting our shared objectives.”

According to reports, Babakov also hypothesized that the new currency will be backed by rare-earth elements and gold.

Countries in the grouping. Source: Library of Congress

Former Goldman Sachs chief economist Jim O’Neill urged the BRICS alliance to grow and challenge the dollar’s supremacy this week. In an article published in the journal Global Policy, he argued that “the U.S. dollar dominates global finance much too much.”

The notion of a BRICS currency is not novel. Members of the bloc were reportedly contemplating the introduction of a new digital currency for a unified payments system in 2019.

Last week, China and Brazil secured an agreement to trade in their respective currencies. The move will eliminate the role of the U.S. dollar as a middleman, further allowing both countries to separate themselves from the global reserve currency.

According to sources, the deal will permit direct trade and financial operations between China and the largest economy in South America, Brazil. The Chinese yuan will be swapped directly for Brazilian reals and vice versa, bypassing the US dollar.

China’s central bank digital currency initiative is advancing rapidly, while crypto usage in Brazil is on the rise following its legality as a payment mechanism late last year.

While banking authorities tighten the screws on the nascent industry, Uncle Sam is committed to continuing his battle with cryptocurrencies.