The BRICS countries are determined to end their submission to the US dollar. Several months ago, they announced a monetary plan for this purpose. The idea of the latter is to implement a common currency. Apparently the situation has changed.
Winning the dollar through a common payment device
So far, it was expected that the BRICS countries will carry out their common currency project. At the beginning of July, they had announced that they were ready for this. But according to a new development, this is not the direction the group of countries are heading.
According to Russian diplomat Roman Babushkin, the BRICS are now exploring a new plan. It consists of developing a new payment system to reduce their dependence on the US dollar.
The idea of this new strategy is basic. It is essentially a matter of betting on the local currencies of the countries of the organization. This, by using them to carry out cross-border transactions.
This option should also include the settlement of transactions between BRICS member states. The latter thus wish to reinforce the predominance of their individual local currencies.
But the ultimate objective of this new strategy is obviously to destroy the hegemony of the American currency. Or at all to limit its economic power. “The implementation of a BRICS payment instrument based on a basket of currencies would facilitate mutual settlements and reduce dependence on the US dollar”said Mr. Babushkin.
Change in BRICS monetary policy?
It should be noted that this new strategy is out of phase with what the organization had already announced. Indeed, the BRICS countries had indicated, under the impetus of Brazil, a plan to implement a community currency.
It seems that this idea is no longer really on the agenda. At least in the short term one imagines. In any case, the project was rejected point blank by Roman Babouchkine. The Russian diplomat evokes constraints related to its feasibility.
According to the explanations of the Russian politician, the alliance is not yet equipped to embark on such a transformational enterprise. The project of creating a new currency would actually be a little more complex than expected. A situation that makes its realization difficult for the moment.
However, the BRICS seem determined to drive the birth of a new world monetary order. At least that is what their activism against the dominance of the dollar seems to indicate.
The idea of developing a new payment system that integrates the BRICS countries could have other aims. In particular, to strengthen the economic attractiveness and the strike force of the group of countries.
According to several analysts, the BRICS plan is to convince other countries to abandon the American currency. This would result in encouraging many developing States to trade without depending on the dollar. A monetary policy that does not exclude cryptos. A country like Russia relies on the latter to continue the war effort against Ukraine.
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