BRICS+ nations are actively trying to ‘de-dollarise’ and put forward alternatives – but a BRICS currency would have to work very differently from how many of us expect.
As the BRICS bloc continues to expand and establish itself as a hedge against so-called ‘Western nations,’ talk of forming a united currency for member states has been one of the more dominant topics.discussions on how to better facilitate trade between BRICS nations and decrease reliance on the US dollar have been prominent within the bloc.
According to Professor of Finance & Economics at Cumberland University and Free Market Foundation consultant Richard J Grant, there could be a way to do it, however. Just not in the sense that most people understand. “This explains the ubiquitous use of the US dollar in international trade and, within some countries, as a de facto local currency and store of wealth. All the BRICS nations have benefited from the worldwide trading relationships facilitated through acceptance of the dollar as the common international currency.
“None has sustained the cultural development, and the relationship between government and governed, that builds confidence in the rule of law – and is a prerequisite for the emergence of deep financial markets. This takes a long time to develop but can be destroyed rather quickly.”Talk of a ‘BRICS currency’ has emerged because of major shifts in the global landscape.
Notably, American-led sanctions against trade with Russia have blocked access to dollar-based banking and payment systems. Grant said that gold is the definitive reserve currency, and it is rumoured that the BRICS currency – “the Unit” – will be a gold-based unit of account, possibly combined with a basket of BRICS national currencies.
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