BRICS Common Currency
The BRICS common currency is an initiative proposed by the leaders of Brazil, Russia, India and China to create a unified payment system among their countries. This would allow them to make payments in each other’s currencies without having to use international money exchanges or any other third party intermediary. The idea was first raised at a meeting between all five members of the BRICS (Brazil, Russia, India, China and South Africa) in 2014.
Advantages of a BRICS Common Currency
A common currency among the countries that form part of the Brics allows for increased trade activity between these nations as well as greater economic integration. Additionally it gives member states access to more competitive exchange rates than those provided by traditional foreign exchange services such as banks or brokers which can be expensive due to commissions charged on transactions. Furthermore this could help reduce inflation levels across participating economies since there will no longer be discrepancies in prices caused by different exchange rate fluctuations for each country’s own individual fiat currencies used when trading with one another – allowing goods and services from one nation to remain consistently priced regardless if they are purchased domestically or internationally within BRIC Nations .
Disadvantages of a BRICS Common Currency Despite its potential advantages mentioned above , implementing such a project comes along with certain risks too: Firstly , while creating more favourable conditions for intra-trade activities amongst members; it also opens up opportunity gaps between non-participating countries who may find themselves unable to compete fairly against established players using better resources/currency systems available exclusively within Brics bloc only ; Secondly , establishing & maintaining monetary stability necessary for smooth functioning might prove difficult considering diversity existing amongst current fiscal policies followed by respective governments involved . Last but not least introduction new type financial instrument carries risk associated inherent instability linked cryptocurrencies which need addressing before adoption .
