The vice president and chief financial officer of the BRICS Bank has provided insight into the economic bloc’s ambitions to establish a common currency for BRICS nations. These comments come amidst reports suggesting that Russia has confirmed the BRICS’ intention to introduce a gold-backed currency, with an official announcement expected during the upcoming BRICS leaders’ summit.
Attention on “Gold-Backed BRICS Currency”
The concept of a common BRICS currency has garnered significant attention as the leaders’ summit approaches, coinciding with an increasing number of countries exploring de-dollarization. Consisting of Brazil, Russia, India, China, and South Africa, the BRICS leaders’ summit will be held in South Africa from August 22 to 24.
On Tuesday, RT reported that the BRICS is set to launch a new trading currency backed by gold, which will be discussed at the August summit. The news outlet referenced a tweet from the Russian Embassy in Kenya on Monday, stating: “The BRICS countries are planning to introduce a new trading currency, which will be backed by gold. More and more countries recently express desire to join BRICS.”
RT’s coverage has sparked a wave of headlines suggesting that Russia has made an announcement about establishing a gold-backed common currency for BRICS nations. However, the tweet from the Russian Embassy in Kenya leads to an article published on April 24, discussing the possibility of backing the BRICS common currency with gold. There is no indication of any new information regarding a common BRICS currency.
BRICS Bank Official Highlights Long-Term Goal of Common Currency
Leslie Maasdorp, vice president and chief financial officer of the New Development Bank, also known as the BRICS Bank, shared insights into the economic bloc’s plans for a common currency in an interview with Bloomberg on Wednesday. The New Development Bank was established by BRICS nations to mobilize resources for infrastructure and sustainable development projects in emerging markets and developing countries.
Maasdorp explained that although BRICS members aim to promote the use of national currencies, moving away from the U.S. dollar, there is no immediate plan to create a common currency that would challenge the dominance of the USD. Highlighting that the BRICS Bank uses the U.S. dollar as its anchor currency, he stated:
The development of an alternative is a medium to long-term goal.
Some speculate that the Chinese yuan could potentially replace the U.S. dollar as the world’s dominant currency. While acknowledging the yuan’s increasing popularity as a trading currency, Maasdorp noted that it is “a very long way from becoming a reserve currency.”
The vice president of the BRICS Bank concluded by emphasizing that there are currently no proposals to establish an alternate currency for BRICS:
At present, we are only suggesting the need to enhance the use of local currencies within our member countries. Over time, this will strengthen our ability to protect our economies from currency devaluation when borrowing in dollars, for example. However, there is no intention at this time to create a BRICS currency in that sense.
These statements align with India’s External Affairs Minister S. Jaishankar, who reportedly stated earlier this week that there are no plans for a new BRICS currency. Instead, the focus remains on strengthening the respective national currencies within the BRICS framework.
What are your thoughts on the possibility of a common BRICS currency? Share your opinions in the comments section below.
Frequently Asked Questions (FAQs) about common currency plans
Will the BRICS introduce a common currency soon?
No, according to the vice president and chief financial officer of the BRICS Bank, there are no immediate plans to create a common currency that would challenge the dominance of the U.S. dollar. The focus is on enhancing the use of local currencies within the BRICS framework and strengthening the respective national currencies of member countries. The development of an alternative currency is seen as a medium to long-term ambition.
More about common currency plans
- RT: BRICS countries plan to introduce a new trading currency backed by gold
- Bloomberg: BRICS Bank official discusses common currency plans
- New Development Bank (BRICS Bank)
- BRICS Leaders’ Summit