Brazilian President Luiz Inácio Lula da Silva emphasized the need for all five BRICS nations to collaborate on this project to enhance their competitiveness globally.
Leaders from BRICS countries, such as Russia and South Africa, have expressed support for the idea of an alternative currency that bypasses the US Dollar. Some BRICS nations are already working on their CBDC pilots.
Latest reports in the global markets suggest that the BRICS nations have been working on a common currency in order to reduce their dependency on the US Dollar. Brazilian President Luiz Inácio Lula da Silva stressed further upon this stating that all five nations should actively work on this project in order to compete on the global stage.
As reported by the Japanese publication Nikkei, President Lula’s comments came after the G7 meeting in Hiroshima. Here, the Brazilian president explained the benefits of the common currency that wouldn’t depend on the US Dollar.
President Lula also said that Brazil would be working to boost its economic ties with China and “hopes to create a common BRICS currency”. Interestingly, this comes at a time when the economically strong G7 nations have been making a move to decouple from China. The Brazilian President’s comments come after a month’s time from floating the proposal of a BRICS currency. He said:
Why can’t an institution like the BRICS bank have a currency to finance trade relations between Brazil and China, between Brazil and all the other BRICS countries? Who decided that the dollar was the [trade]currency after the end of gold parity?
BRICS Pushing for A New Currency
Apart from President Lula, other leaders from the BRICS nations have also been stressing the idea of having a BRICS currency. One of the top Russian lawmakers recently stated that the BRICS is in the process of creating an alternative currency that would bypass the US Dollar.
South African Foreign Minister Naledi Pandor has also stated recently that the launch of a global BRICS currency is “a matter we must discuss and discuss properly”. Interestingly, there also have been talks that the BRICS nations might consider Bitcoin as their currency. There are several compelling reasons why Bitcoin is considered attractive.
One of the key reasons is its potential to serve as a reserve asset for countries, offering diversification away from the US dollar. This strategy can help mitigate currency risks and economic instability, providing a hedge against traditional financial systems.
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Moreover, Bitcoin adoption by BRICS countries can facilitate trade and financial transactions within the group and with other nations outside the conventional banking system. This becomes particularly significant for developing economies within BRICS, where a significant portion of the population remains unbanked or underbanked, enabling greater financial inclusion.
Countries like China, Brazil, and India are already exploring the possibility of having a central bank digital currency (CBDC) in their regions. As per the latest reports, the central bank of Brazil joined hands with giants like Microsoft and VISA for the CBDC pilot.
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