The BRICS nations, originally comprising Brazil, Russia, India, China and South Africa, are exploring the options to establish a new reserve currency, leveraging blockchain technology to store and transfer digital tokens, supported by a basket of their respective currencies.
Russia is seeking to convince BRICS countries to build an alternative platform for international payments that would be immune to Western sanctions when it hosts the group’s leaders at a summit next week, Reuters reported.
This, in turn, would then allow those currencies to be easily and securely exchanged, bypassing the need for dollar transactions. Russia sees it as a way to resolve increasing problems in settling trade payments, even with friendly countries such as China, where local banks fear they could be hit by secondary sanctions by the United States.
According to Nasdaq.com, some experts believe BRICS currency is not feasible, as it would unite countries with very different economies. There are also concerns that non-Chinese members might increase their dependence on China’s yuan instead, it added.
It is also worth noting that the bloc has discussed the potential launch of a Yuan-backed stablecoin as well, which will further streamline cross-border transactions.
This switch is part of BRICS’ broader strategy, which seeks to reduce dependence on the US dollar in international trade as well as bolster economic cooperation among emerging markets.
Additionally, Putin highlighted that new economic opportunities will be created by integrating digital currencies not only for BRICS nations but also for other developing economies. This will position the initiative as a catalyst for global growth, according to the Russian president.
The influence of the bloc continues to grow, with recent expansions including countries like Egypt, Iran, and the United Arab Emirates (UAE).
BRICS is positioning itself as a key player in shaping the future of global finance with over 30 other nations showing interest in closer ties.
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