Why Is a Common Currency for BRICS Inevitable?

Today, within the Eurasian Economic Union, economic transactions are settled with national currencies, which are increasingly overshadowing the dollar. Most economic exchanges involving Russia are now conducted in rubles. The euro and the dollar are undergoing displacement. This transformation in the global financial landscape cannot go unnoticed. The possibility of a common commercial currency emerging within the BRICS is back at the center of discussions. In a recent interview, Russian economist and politician Sergei Glaziev dropped a bombshell: a common BRICS currency is inevitable. Details.

BRICS: Redefining the Terms of the World Economy?

For the past few months, BRICS’ proactive stance seems to confirm predictions regarding the creation of a common currency within the bloc. In his interview, Russian economist Sergei Glaziev asserted that we are moving towards an era where the global economy will be dominated by a new currency, that of the BRICS.

He references the volatility of exchange rates, the instability and unpredictability of the current global economic system, and the economic sanctions imposed by Western powers, among other factors. According to the Russian economist, the BRICS nations collectively have the necessary material capacity to redefine the terms of global trade.

Indeed, he justifies, when it comes to creating a common currency, BRICS member countries won’t be starting from scratch. He points out that they already have an appropriate conceptual framework and a wide range of commodities.

However, Sergei Glaziev emphasizes that the BRICS currency will not replace the dollar. For him, the BRICS currency will fill the void left by the declining hegemony of the dollar. It will become the new unit of account used for settlements on a global scale.

🚨📽️ ALERTE INFO 📽️🚨

La #Chine et le #Bresil réalisent leur première transaction en monnaie locale hors #dollar.

Cette décision s'ajoute à celle d'un grand nombre d'autres pays qui s'éloignent du dollar américain dans le cadre d'un rééquilibrage de l'économie mondiale.… pic.twitter.com/HzDtiF7sRL

— BRICS News FR (@BRICSNewsFR) October 17, 2023

The Technical Challenges of Realizing the Project

While it is true that a common currency would be an ambitious project for BRICS dominance, the path to its realization could be more complex than it seems. After all, the BRICS are a gathering of economies of different sizes with varying monetary policies.

Furthermore, decisions within the bloc can only be made by consensus. The recent expansion of the bloc, which has welcomed five new members, could slow down decision-making on sensitive subjects like a common currency.

Perhaps Vladimir Putin, who currently holds the BRICS presidency, has already developed a plan to address the issue. He stated during the 15th BRICS Summit that the “inevitable shift towards the dedollarization of economic ties within BRICS is accelerating.” So, wait and see!