The initiative to create a common currency by the BRICS states (Brazil, Russia, India, China and South Africa) is an important step towards the creation of a global economy based on the equality and interdependence of countries. This idea is not new, but it was frozen for several years. Now, however, it is in the final stretch and preparations for its implementation have already begun.
BRICS consists of five major developing countries with a combined economic power and population of about half of the global economy. The idea of creating a common currency has come to the fore in the context of the search for a more balanced and fair global system of economic development and trade.
This common currency, which will be called BRICScoin, is expected to be a digital currency, like Bitcoin and other cryptocurrencies.
At the same time, the introduction of a common currency by the BRICS states will strengthen their international influence and allow them to acquire a greater role in the international economic scene. The creation of a common currency by the BRICS states can lead to a reduction in the level of dependence on the dollar and the euro and create a new factor that will cause competition in the international economic arena.
Russian Duma Deputy Speaker Alexander Babakov said on March 30 about the development of a new currency that will be presented at the organization’s upcoming summit in Durban next August.
“The transition to settlement of international transactions in national currencies is already the first step.
The next is to provide the circulation of digital or any other form of a fundamentally new currency in the near future.”
He also pointed out presenting the Russian plan that a single currency could probably emerge within the BRICS, and this would be linked not only to the value of gold but also to “other product groups, the rare earths and so on”.
Nevertheless, there are also many questions and challenges in the implementation of a common currency by the BRICS states. The economic imbalance between the BRICS countries may create problems in the implementation of a common currency, as some countries may be adversely affected by the disparity in their economic situation. In addition, there are many issues related to capital freedom, the independence of central banks.
Brazil, Russia, India, China and South Africa are the top five emerging economies that make up the BRICS acronym. In addition, the next BRICS summit is scheduled for August.
Along with the creation of a common currency for the BRICS states, there are other initiatives aimed at ensuring the countries’ independence from the dollar and strengthening the multicultural world. One such initiative is the International Trade Finance System (INSTEX), which was established by Iran’s European interlocutors in response to the US withdrawal from the Iran nuclear deal. INSTEX aims to allow European companies to trade with Iran despite US sanctions.
This initiative demonstrates the willingness of European leaders to seek alternatives to trade, as well as their ability to work with other countries to address the challenges of the global economy.
However, despite the many advantages, there are also opposing views on the introduction of a common currency. Some point out that the creation of a common currency could create a backlash from the rest of the world, who would feel threatened by the strong economic and political influence of the BRICS.
Moreover, the creation of a common currency may require a large investment in infrastructure and technologies. The BRICS have already spent large sums on developing their economy and creating a common currency
Following the adoption of the BRICS common currency, many analysts believe that this could lead to a reshaping of global trade and the economy. First, having a common currency could facilitate trade between the BRICS countries, as costly foreign exchange transactions would be avoided.
In addition, having a common currency could give the BRICS states more leverage in negotiations with the remaining major economic powers. At a time when the global economy is complex and inevitably interconnected, the creation of a common currency by the BRICS could help maintain balance in the global economy.
Alongside this, there are also some concerns about the adoption of a common currency by the BRICS states. Some believe that such a move could be an attempt by these countries to gain more influence in the global financial space and replace the dollar as the main settlement currency. However, the reality is that achieving such a change is not at all easy and requires cooperation and agreement from many agencies at the international level.