blockchain media Bitcoin.com and Indian media recently reported that Alexander Babakov, deputy chairman of the Russian State Duma (the House of Commons), declared that the BRICS countries (Brazil, Russia, India, China, South Africa) are discussing the creation of some kind of BRICS currency, which may be some kind ofdigital currencyscheduled to be discussed at the BRICS summit in August.
Speaking at the St. Petersburg International Economic Forum in New Delhi, India, Babakov said: “Settlement in national currency has been completed. The next step is to provide digital or other forms of new currency. I think the BRICS summit will be ready to announce the new plan. It is currently under preparation.” The August summit will be hosted by South Africa.
Babakov is open to the possibility of a common currency within the BRICS countries, possibly withgoldOr commodities such as rare earth elements are guaranteed.
Jim O’Neill, the former Goldman Sachs chief economist who coined the term “BRICS,” called this week for the group to continue to expand and challenge the dollar’s dominance.
“The dollar plays a much larger role in global finance than it actually does,” he said in a paper published in the Global Policy Journal. “Whenever the Federal Reserve (Fed) promotes monetary tightening or monetary easing, The dollar value and follow-on effects are always dramatic.” Thus, dollar dominance is a burden for countries whose debt is denominated in dollars.
O’Neill suggested that more emerging countries such as Mexico and Turkey should be opened to join, so that the BRICS group can expand into a fairer global system with multiple currencies, but he reminded that opening new members needs to adopt strict standards, focusing on climate financing, health care and trading.
As early as 2019, it was reported that BRICS members were discussing the creation of some newdigital currencyfor the unified payment system.
Recently, there have been some news related to de-dollarization. Earlier this week, China and Saudi Arabia signed an important oil agreement. Saudi Aramco, the state-owned oil company of Saudi Arabia, acquired a 10% stake in China Rongsheng Petrochemical for US$3.6 billion. Agreed to jointly build an integrated refinery and petrochemical facility in northeast China.
Brazil and China finalized an agreement this week to use their respective currencies directly for trade and financial transactions, representing China’sRMBTransactions will be conducted directly with Brazilian Real, eliminating the need for US dollars as an intermediary.