- The BRICS coalition hints at launching a new international currency to challenge the U.S. dollar’s supremacy.
- Jim O’Neill, who christened the group, considers the idea as baseless and highlights the inherent challenges.
BRICS’ Ambitious Currency Proposal Draws Skepticism
As the economic behemoth that is the BRICS alliance considers a move away from the longstanding dominance of the U.S. dollar, it seems not everyone is convinced. Despite conflicting internal communications about the creation of a BRICS-specific currency, the world watches with bated breath.
BRICS vs. Dollar: A Realistic Undertaking or Mere Posturing?
Jim O’Neill, renowned for coining the BRICS acronym a decade prior, has openly expressed his skepticism. O’Neill, in his recent dialogue with the Financial Times, dismissed the notion of BRICS challenging the dollar’s hegemony, emphasizing the massive undertaking it represents.
According to the seasoned economist, launching a currency requires much more than just aspirations and declarations. A central banking system, which forms the backbone of any currency, would need to be meticulously crafted from the ground up. O’Neill jestingly questions the practicality of such a move:
“They’re going to create a BRICS central bank? How would you do that? It’s embarrassing almost.”
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O’Neill, with his rich experience, including his tenure at Goldman Sachs, further critiques BRICS’ impact, or the lack thereof, since its inception. He bluntly remarked that the consortium hasn’t brought any paradigm-shifting policies to the fore since its inaugural gathering in 2009. His belief is that the fervor to decentralize from the dollar may stumble, especially considering the dearth of global market support it might face.
Furthermore, his current role as a senior adviser at Chatham House provides him a vantage point to gauge international dynamics. He observes the rifts within the BRICS alliance itself, hinting at the internal struggles and disagreements that could undermine its united front. The tension between member nations, especially the escalating border dispute between India and China, exemplifies these fissures. Such geopolitical skirmishes, in O’Neill’s view, might further diminish the bloc’s collective efficacy.
With these observations, the article also draws attention to China’s perceived strategy within BRICS. Many opine that Beijing may be leveraging the alliance to further its global aspirations and cement its position as a dominant global player.
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