BRICS Digital Currency Debate: The Future of Global Trade or Merely a Fantasy?

An illustrative meeting of nations with vibrant monumental buildings representing Brazil, Russia, India, China, and South Africa under twilight sky, digital currencies floating above, portraying collaboration. The discussants cast long shadows, symbolizing skepticism. Mood is intense, evoking Renaissance-era conflict and debate. The sky is dotted with potential new member nations as stars, emphasizing the uncertain future.

In an upcoming BRICS summit, experts from Brazil speculate the initiation of discussions towards a digital fiat for the block. According to Evandro Caciano, the head of foreign exchange at Trace Finance, the participating nations will likely commence establishing workgroups dedicated to this matter. Progress towards a potential BRICS-issued digital fiat, though speculated to take five to ten years, is seen as a positive step by many, including Milena Araújo, an analyst at investment service provider Nexgen.

Working towards a collective digital currency is deemed beneficial. Caciano suggests that the BRICS bank could issue this currency, further acting as its regulating entity. The global economic climate, currently undergoing serious shifts, gives semblance to the idea of a BRICS coin, which could potentially replace the US dollar in trade deals among BRICS nations, a notion supported by Brazilian President Luiz Inacio Lula da Silva.

Despite these ambitious proposals, there are those such as former Goldman Sachs economist Lord Jim O’Neill, who express deep scepticism about the feasibility of a BRICS coin and the prospect of a BRICS central bank.

While de-dollarization efforts amongst BRICS nations lead towards the launch of a digital token, it’s worth noting that individual nations such as China, Russia, and Brazil have embarked on their own Central Bank Digital Currency (CBDC) initiatives. The potential for cross-border trade with their respective CBDCs, namely the digital yuan, the DREX, and the digital ruble, have also been discussed. Russia and aspiring BRICS member Iran have conversed regarding a co-launch of a gold-pegged stablecoin.

Despite officials denying that a common BRICS currency is on the agenda, it’s a topic that has seen continuous deliberations in previous summits. This upcoming summit could potentially determine whether membership applications from other nations, including Venezuela, Vietnam, Indonesia, Saudi Arabia, Iran, Argentina, Cuba, Nigeria, and Thailand, will be accepted. This could potentially lead to a wider adoption of the speculated BRICS coin, or create disruption in local digital currencies and overall consensus for a shared digital fiat. The continuous balancing act between individual national interests and collective benefits becomes the dominating discourse in the evolution of cryptocurrency within the BRICS bloc.

Source: Cryptonews

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