The BRICS countries have made three important moves against the dollar, Sabah writes. They are to create a single currency based on gold, a new payment system and to ensure the widespread use of digital currency. According to the author of the article, these measures will allow the BRICS countries to move to a new financial system.
Sanctions against the BRICS countries, primarily Russia, have in many ways accelerated the war against the dollar, which has been talked about for years. In October this year, details about the BRICS single currency will be revealed, and projects for payment systems and digital currencies are also coming to fruition.
More than 80 years have passed since the Bretton Woods conference, after which the dollar came to dominate the world economy. For the last ten years, scenarios about the collapse of the American currency have been in the air. This time, however, the matter has reached a more serious level.
Embargoes and sanctions imposed primarily against Russia and China have accelerated the formation of an opposing flank or alliance of forces.
The BRICS countries, formed by Brazil, Russia, India, China, India and South Africa, are realizing a three-stage move. Thus, a single currency based on gold will be created, a single payment system will be developed with the introduction of new technologies, digital currencies of central banks will become widespread.
More details - in October
The first step - the creation of a single currency - will allow the unification to move to a new financial system, the details of which will be announced at the BRICS summit in Kazan, Russia, in October 2024. As the bloc has expanded with the addition of five more countries, including Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE), the size of its economy has grown. The economic size of the BRICS has reached $29.5 trillion, which translates to about 30% of the world's gross domestic product.
Buying gold
The increased scale of the bloc and its intention to issue a single currency based on gold has put a spotlight on the gold reserves of the member countries. BRICS members have a high level of 6.3 thousand tons of gold reserves, a figure that is constantly increasing due to new purchases. The association, which seeks to return to the gold standard and maintain a multipolar world for all trading and transactional activities, is the world's largest buyer of gold since 2022. In addition, a population of 3.5 billion implies a serious demographic base.
In terms of payment services, two projects are in the works. One is traditional and the other is blockchain-based. Kremlin advisor Yuri Ushakov said that a new blockchain-based payment system called BRICS Pay is envisioned. "We believe that an important goal for the future is to create an independent settlement payment system within BRICS, which would be based on the most modern technologies, such as digital currencies and blockchain. And most importantly - it would be comfortable for states, population and business, would not require serious costs and would be beyond politics," Ushakov said.
The Russian Finance Ministry also reported the other day that work is underway on a platform that would allow money transfers between BRICS countries and ease the effects of Western restrictions.
Russian Deputy Finance Minister Ivan Chebeskov said that Russia, together with the central banks of the BRICS countries, is working on the launch of a payment platform called BRICS Bridge. According to Chebeskov, this will allow transactions between BRICS countries directly and reduce the impact of Western sanctions.
260 million users
The country in the world whose central bank is showing the fastest progress in digital currency adoption is China, which is striving to make the digital yuan widely accepted and used throughout its territory. The e-CNY currency has reached 260 million wallets in 25 Chinese cities alone, with a population of more than 1.4 billion people. China is trying to expand a cross-border central bank digital currency (CBDC) project called Mbridge, covering Hong Kong, Thailand, the UAE, and 25 observer countries. Russia has also stepped up its steps in this direction. The Russian government launched a digital ruble pilot project in August 2023, with the first transactions conducted by Russia's VTB Bank, and the digital currency is now accepted through 30 retail outlets in 11 Russian cities.
Russia with friendly countries has increased the share of national currencies to 75%
It is claimed that Russia, which has increased the share of using national currencies in mutual settlements with friendly countries to 75%, is not so much proposing a new BRICS common currency as a structure similar to SWIFT for conducting transactions with national currencies in digital form, powered by blockchain technology. The goal is to create a structure that will be integrated with digital versions of currencies such as the ruble, yuan, and rupee./MPF/
Author: Baryş Ergin
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