Cryptocurrencies might be the avenue to eliminate the dollar’s popularity; BRICS member countries discussed designing a digital currency in their latest summit. According to RBC, a Russian news outlet, the BRICS member states are considering a common payment settlement system.
The summit held in Brazil focused on how Russia and its counterparts within BRICS could cut their foreign trade costs. Reports reveal that they are considering a cryptocurrency that will face out the dollar as an International peg currency. Furthermore, a common payment settlement system would accelerate trade amongst BRICS members.
Kirill Dmitriev, Russia Direct Investment Fund (RDIF) director general, confirmed that the BRICS Business council is indeed looking to launch a single settlement system. He noted that this move would benefit South Africa, China, India and Brazil both in economic stimulation and currency stability;
“An efficiently operating BRICS payment system is capable of stimulating settlements in national currencies and ensuring the stability of settlements and investments between our countries, which form more than 20% of the global influx of foreign direct investment.”
A BRICS Digital Currency?
An innovation of this nature would change a lot of international trade dynamics for the BRICS block. The move would accelerate Russia and China’s strategy to abandon the dollar. In addition, BRICS would increase efficiency in its AML practices as well as stay ahead in innovation, science and FinTech.
However, strong members like Russia are still anti crypto; the authorities through the Internal Affairs ministry are working on a regulatory framework around digital assets. Dmitriev did not comment as to when they would make a digital currency move like China but emphasized on the potential of a single payments system.
BRICS is not the only organization that has considered a common crypto. Last month, German banks tabled a proposition for the creation of a digital Euro. They argued that it should be standard and cryptography-based; basically, a platform has to be created in which the digital Euro will operate.