BRICS countries working towards developing a new currency

03/31/2023 05:19 • Tech Trends • 90 views

According to reports, Alexander Babakov, Vice President of the Russian Duma, revealed that the BRICS countries are committed to developing a new currency, and relevant countries may propose ideas related to this goal at the upcoming South African Summit, and relevant work is ongoing, He added, “The transition to domestic currency settlement is the first step, and the next step is to provide digital or other forms of new currency circulation in the near future.” (Watcher. guru)

Vice President of Russia: The BRICS countries are developing a new currency

BRICS countries have been steadily gaining economic and political prominence in the global arena. This group of nations comprises Brazil, Russia, India, China, and South Africa. Recently, there have been reports that the group is committed to developing a new currency. Alexander Babakov, Vice President of the Russian Duma, revealed that relevant countries may propose ideas related to this goal at the upcoming South African Summit. Moreover, the relevant work is ongoing, and the idea is to transition from domestic currency settlement to providing new digital or other forms of currency circulation in the near future. In this article, we will explore what this means for the BRICS countries and the global economic landscape.

The significance of developing a new currency

The existing global financial system is dominated by the US dollar, and this has been the case for a long time. This system has its pros and cons, and there have been many debates about its sustainability. Moreover, it has been argued that it is not equitable for countries that do not have a say in the global currency exchange. The BRICS countries have recognized this disparity and are working towards changing it.
Developing a new currency could serve many purposes. Firstly, it could reduce reliance on the US dollar, providing countries with greater autonomy over their financial systems. Secondly, it could increase liquidity and facilitate trade between BRICS countries. Thirdly, it could lead to a more equitable distribution of power in the global financial system.

The ongoing work towards developing a new currency

The BRICS countries have been working towards developing a new currency for a while now. There have been many proposals for a BRICS currency, including the idea of a gold standard currency. However, there has been no concrete development in this regard. The upcoming South African summit could be a turning point. There are expectations that the summit will be used as a platform to flesh out ideas related to the currency development.
The transition to domestic currency settlement is seen as the first step towards developing a new currency. This process has already begun, with a few BRICS countries entering into currency swap agreements. These agreements allow countries to trade in their domestic currencies instead of relying on the US dollar. Moreover, these agreements reduce currency volatility and the risks associated with currency fluctuation.
The next step is to provide digital or other forms of currency circulation in the near future. This is an ambitious goal, and it remains to be seen how the countries will work towards achieving it. There are some concerns that developing a new currency may not be practical, given the complexities involved. However, the countries seem committed to this goal, and it remains to be seen how the situation develops.

Conclusion

Developing a new currency is not an easy task, especially when it involves such diverse countries. However, the BRICS countries have recognized the need for change and are working towards creating a more equitable financial system. The transition to domestic currency settlement and the development of digital or other forms of currency circulation are ambitious goals, and it remains to be seen how the process develops. However, one thing is clear – the global economic landscape is changing, and the BRICS countries are at the forefront of this change.

FAQs

Q1. What is the BRICS Group?
The BRICS Group comprises Brazil, Russia, India, China, and South Africa.
Q2. Why do the BRICS countries want to develop a new currency?
The BRICS countries believe that the existing global financial system is dominated by the US dollar, and this system is not equitable for countries that do not have a say in the currency exchange. Developing a new currency could reduce reliance on the US dollar, provide countries with greater autonomy over their financial systems, increase liquidity, and lead to a more equitable distribution of power in the global financial system.
Q3. What are the benefits of domestic currency settlement?
Domestic currency settlement reduces currency volatility and the risks associated with currency fluctuation. Moreover, it allows countries to trade in their domestic currencies instead of relying on the US dollar.

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