- The BRICS nations express a “medium to long-term” ambition to create a new global currency challenging the US dollar.
- Though currently reliant on the dollar, BRICS is pushing to boost trade in their respective national currencies.
The powerful economic alliance known as BRICS, comprising Brazil, Russia, India, China, and South Africa, has unveiled its ambition to create a new global currency. This move could potentially rival the prevailing dominance of the US dollar in the foreseeable future, according to Leslie Maasdorp, the CFO of the BRICS New Development Bank.
Shaping the Future of Global Currency
At present, the BRICS alliance is channeling its efforts to enhance direct trade in their national currencies, Maasdorp informed Bloomberg TV. However, he also conceded that the consortium isn’t quite prepared to introduce a new fiat currency to compete with the current global reserve currency.
Yet, Maasdorp is optimistic about the future.
“The development of anything alternative [to the US dollar] is more a medium to long-term ambition,”
he asserts. He also pointed out that the Chinese Renminbi is still quite a distance away from contesting the supremacy of the US dollar.
Moreover, Maasdorp disclosed that the New Development Bank, an entity dedicated to supporting infrastructure and sustainable development endeavors in emerging markets, is currently wholly reliant on the US dollar.
“Our balance sheet is in US dollars. We are firmly embedded in the US dollar hemisphere,”
Notwithstanding this dependence, differing views exist among BRICS representatives about the timing and feasibility of a future common currency. Advocates like Brazilian President Luiz Inácio Lula da Silva and certain Russian leaders actively endorse the inception of a new currency. Conversely, South African leaders, including Foreign Minister Naledi Pandor, urge for thorough discussions on a global BRICS currency, signaling a more cautious stance.
BRICS, as an influential economic coalition, has attracted substantial attention from countries aspiring to join. As per African Ambassador Anil Sooklal, an impressive count of 13 nations from Africa, Latin America, and Asia have either applied or formally reached out to BRICS leaders to join the alliance. This interest, along with the strategic ambition to introduce a new global currency, signals the potential for a paradigm shift in the global economic landscape.