At the BRICS (Brazil, Russia, India, China, South Africa) summit last year, the much-anticipated announcement of acommondigital currency gave way to talk aboutusing local currenciesforcross borderpayments. NowBRICShas expanded from five to ten membersandRussia is currently the organization Chair.Last weekRussia’sDeputy Foreign Minister Sergei Ryabkov discussed the topicsayingthat a common currency is not a current priority.On the other hand, he said it would be possible to move very quickly, implying a solution could be less than a year away.
After this year’s February BRICS meetings, Russia spoke about a BRICS Bridge platform for payments without mentioning digital currency.Two BRICS members, Chinaandthe UAE, are involved in mBridgethesimilarly namedcross bordercentral bank digital currency (CBDC) initiative.Using individual digital currencies for cross-border payments is a significantly different approach than using a common currency.
The Governor of the Bank of Russia, Elvira Nabiullina, has previouslyspokenabout the complexity of creating a single BRICS currency. She made the comments before the BRICS membership expanded.
Ryabkov BRICS common currency comments
“I would not say that this idea has been shelved,” said Mr Ryabkov last week. “Although its implementation, as we all understand, involves, among other things, such aspects as the creation of a single issuance center, the creation of a Central Bank that sets a common basic discount rate, as possibilities for borrowing from the Central Bank by the banks of the participating countries.” That’s according to an automatically translated press conference, as reported by Ria Novosti.
“(We) agree that today BRICS, whichhas15 years behind it and has just doubled in size, is hardly ready for such steps and experiments.But this does not mean that this idea has been postponed.”
He added that a “quitebold, quite innovative scheme in this area will be worked out, and in a future that is not calculated in years and decades, but much faster.”
As context, during January discussions about current Russian CBDC pilots, central bank Governor Nabiullina said the CBDC platform was designed to supportintegration with similar foreign solutions. “We are currently conducting consultations and negotiations with many friendly countries and, of course, with the BRICS countries, on cross-border payments through digital currencies.”
FAQs
The potential impact of a new BRICS currency on the US dollar remains uncertain, with experts debating its potential to challenge the dollar's dominance. However, if a new BRICS currency was to stabilize against the dollar, it could weaken the power of US sanctions, leading to a further decline in the dollar's value.
What digital currency will BRICS use? ›
BRICS members have not developed their own currency; however, a BRICS blockchain-based payment system is in the works, according to Kremlin aide Yury Ushakov in March 2024.
Has Russia announced that the BRICS currency will not be shelved? ›
BRICS, the intergovernmental organization founded by Brazil, Russia, India, China and South Africa, has not shelved the idea of a common currency. However, it's a complex process that will take some time, Russia says.
Which countries want to join BRICS? ›
Why do Malaysia and Thailand want to join BRICS? KUALA LUMPUR -- Two Southeast Asian nations, Malaysia and Thailand, have recently revealed their plans to join the BRICS grouping of emerging nations as middle power countries seek to maneuver amid growing geopolitical uncertainties, including the U.S.-China tensions.
How much is $1 dollar to BRICS? ›
How many BRICS can I buy for $1? You can buy approximately 0.053080 BRICS for $1 today.
Is the US dollar in trouble? ›
There is no reason to expect the U.S. dollar to collapse in the near future. 515 Such a change would require the entire world to change its adherence to an international monetary system that has the greenback at its center. As yet, no replacement is anywhere on the horizon.
How much is BRICS coin in USD? ›
The price of BRICS Chain (BRICS) is $18.80 today with a 24-hour trading volume of $273,237.
What will the US digital currency be called? ›
Like existing forms of money, a CBDC would enable the general public to make digital payments. As a liability of the Federal Reserve, however, a CBDC would be the safest digital asset available to the general public, with no associated credit or liquidity risk.
What is the US dollar backed by? ›
Prior to 1971, the US dollar was backed by gold. Today, the dollar is backed by 2 things: the government's ability to generate revenues (via debt or taxes), and its authority to compel economic participants to transact in dollars.
Can I buy BRICS currency? ›
Exchange-traded funds
For US investors, the easiest and least expensive way to invest in BRICS is through an exchange-traded fund (ETF). Like all ETFs, exchange-traded funds that specialize in BRICS invest in a basket of stocks to track a stock index.
While the renminbi will be the main currency for trade, payments and settlements within Brics, the role of a new prime holding currency offers fresh possibilities. Regarding trade, Saudi Arabia and the UAE will most likely trade with China in renminbi, independent of the denominator currency.
Which country is not involved in BRICS? ›
The correct answer is South Korea. South Korea is not a member of BRICS. BRICS started in 2001 as BRIC, an acronym coined by Goldman Sachs for Brazil, Russia, India, and China. South Africa joined the group in the year 2010.
Is the USA part of BRICS? ›
BRICS is an intergovernmental organization comprising Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates.
How will BRICS affect the US economy? ›
BRICS' Potential Impact on the US Dollar:
Reduced Reliance on the US Dollar: By diversifying their foreign exchange reserves away from the US dollar, BRICS nations aim to mitigate currency risk and potentially weaken the dollar's global dominance.
Which country refused to join BRICS Group in 2024? ›
The correct answer is Argentina. Argentina refused to join the BRICS group in 2024. Iran, Saudi Arabia, Egypt, the UAE, and Ethiopia will join BRICS. These countries are expected to become members starting 1 January, 2024.
What countries are dropping the US dollar? ›
A group of Southeast Asian countries in the region, such as Singapore, Malaysia, Indonesia, Cambodia, and Thailand, are currently contemplating the process of de-dollarization in order to diminish their dependence on the US dollar within their economies.
What threatens the US dollar? ›
"The big threat to dollar dominance is American dysfunction," Steven B. Kamin and Mark Sobel said at Financial Times. The dollar gets its strength from the size of the American economy, which produces 25% of global GDP.
What will happen if the US dollar collapses? ›
Businesses would have to pay more for imports, which would drive up prices for consumers. The value of US assets, such as stocks and bonds, would also decline. In short, the US national debt is a major threat to the dollar's status as the world's reserve currency.
What are the negative effects of BRICS? ›
Inequality Among Members: The economic disparities among BRICS members can lead to imbalanced benefits from the group's initiatives. Larger economies like China tend to dominate decision-making, potentially marginalizing smaller members and hindering equitable distribution of benefits.
