Danger for the dollar! The BRICS confirm the development of a common currency!

We knew that the BRICS were considering a currency. This time, it looks like it's really official. In a strategic move to reshape the global economy, BRICS countries are actively working to create a new currency. This development could mark a major turning point in the fight against the dominance of the US dollar and have profound repercussions on international trade. As emerging economies seek to reduce their dependence on the dollar, this initiative promises to be a significant challenge to the established economic order, with potential implications for the entire global financial system.

Towards a new global economic balance

No respite for the BRICS countries, these nations resolutely committed to countering the dominance of the dollar and the United States. As part of the dedollarization process that they initiated, the development of a new common currency has entered an active phase. Kazem Jalali, Iranian Ambassador to Russia, confirmed this initiative by declaring : “Russia and Iran are working together to create a new single currency”. Currently, more than 60% of bilateral trade between these two countries is done in rubles or rials, which underlines the close economic collaboration between these nations and their desire to reduce their dependence on the US dollar.

This initiative is part of a broader BRICS strategy to strengthen their economic independence in the face of dollar fluctuations. Since Iran joined the alliance in 2023, the group has stepped up its efforts to establish a viable alternative to the current dollar-dominated global financial system. The creation of this common currency could facilitate intra-BRICS trade, provide greater economic stability to its members and protect them against international economic disruptions. This move shows BRICS' determination to reshape the global economic order by proposing innovative and cooperative solutions.

The crypto trail ruled out?

The BRICS decision to develop a common currency marks an important turning point in the global economic landscape. In March, various sources revealed that BRICS was instead focusing on creating a digital payment system using blockchain technology. Next, Ripple's crypto XRP was mooted to play a central role in the BRICS monetary project, particularly through a gold-backed stablecoin to facilitate digital transactions between member countries. If initially, the option of a crypto had been considered, this option now seems to be ruled out.

In any case, a BRICS currency could seriously compete with the US dollar, reduce global dependence on this currency and promote diversification of international reserves. As for blockchain technology, while promising, it has yet to prove its viability at scale for intergovernmental transactions.