The 5 leading emerging economies under the BRICS alliance are working on a new currency with details set to be unveiled at an upcoming summit meeting to be held in South Africa in August 2023, a senior Russian official has revealed.
According to Russian State Duma Deputy Chairman, Alexander Babakov, a common currency would be the next step after recent agreements to settle transactions in their national currencies, adding that it could be digital.
“The transition to settlements in national currencies is the first step. The next one is to provide the circulation of digital or any other form of a fundamentally new currency in the nearest future. I think that at the BRICS [leaders’ summit], the readiness to realize this project will be announced, such works are underway,” said Babakov on the sidelines of the Russian-Indian Strategic Partnership for Development and Growth Business Forum.
According to the official, the currency would be backed by gold and other commodities such as rare-earth elements.
The BRICS economic bloc is composed of five key member nations:
- Brazil
- Russia
- India
- China
- South Africa
Several other countries have also been expressing interest in joining the bloc, including:
- Argentina
- Iran
- Indonesia
- Turkey
- Saudi Arabia, and
- Egypt.
In March 2023, Egypt’s Parliament gave the green light for the country to join the BRICS Bank, also known as the New Development Bank, with lawmakers viewing it as a means of reducing reliance on the US dollar.
Recently, Russian President, Vladimir Putin, and Chinese President, Xi Jinping, agreed to adopt the Chinese Yuan as a settlement currency with emerging economies. Most recently, China and Brazil have also agreed to use their own currencies to settle trade over the dollar, a move which is said to be aimed at lowering investment expenses and fostering economic connections between the two countries.
“The expectation is that this will reduce costs… promote even greater bilateral trade and facilitate investment,” the Brazilian Trade and Investment Promotion Agency (ApexBrasil) said in a statement.
At the same time, South Africa’s Minister of International Relations, Naledi Pandor, stated that her country will not sever relations with Russia based on the requests of other nations or third parties.
In addition, Minister Naledi said that South Africa currently holds the BRICS presidency for this year and is looking forward to collaborating further with Russia under the BRICS framework.
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