#BRICS Countries Committed to Developing New Currency
According to reports, Alexander Babakov, Vice President of the Russian Duma, revealed that the BRICS countries are committed to developing a new currency, and relevant countries ma
According to reports, Alexander Babakov, Vice President of the Russian Duma, revealed that the BRICS countries are committed to developing a new currency, and relevant countries may propose ideas related to this goal at the upcoming South African Summit, and relevant work is ongoing, He added, “The transition to domestic currency settlement is the first step, and the next step is to provide digital or other forms of new currency circulation in the near future.” (Watcher. guru)
Vice President of Russia: The BRICS countries are developing a new currency
In a recent report, Alexander Babakov, Vice President of the Russian Duma, revealed that the BRICS countries are committed to developing a new currency. Babakov stated at a conference in South Africa that relevant countries may propose ideas related to this goal at the upcoming South African Summit. Furthermore, he explained that the transition to domestic currency settlement is the first step, and the next step is to provide digital or other forms of new currency circulation in the near future.
##Why BRICS Countries Want a New Currency
The BRICS countries consist of Brazil, Russia, India, China, and South Africa. These nations collectively represent around 40% of the world’s population and 23% of GDP. They have been considering the formation of a new currency to reduce their dependence on the US dollar and limit the influence of Western economies on their financial systems.
###Reducing Dependence on the US Dollar
Many countries, including the BRICS nations, have been concerned about the dominance of the US dollar in the international financial system. The US dollar is widely used for global trade, oil, and other commodities, which gives the United States considerable power over international finance. The BRICS countries aim to reduce this dependence and create a more diverse, multipolar financial system.
###Limiting the Influence of Western Economies
The BRICS countries also want to limit the influence of Western economies on their financial systems. Western countries, such as the United States, have often set the agenda for financial institutions like the International Monetary Fund (IMF) and the World Bank. This has led to criticisms from developing nations that these institutions often prioritize the interests of Western countries.
##The Transition to Domestic Currency Settlement
The BRICS countries have already taken steps towards reducing their reliance on the US dollar. For example, they have created the Contingent Reserve Arrangement, which is a pool of foreign exchange reserves that member states can use in times of financial stress. This arrangement reduces the need for these countries to borrow from Western institutions like the IMF.
Furthermore, the BRICS countries have been promoting the use of domestic currencies in bilateral trade. By settling their trade in their own currencies, they can avoid the need to convert to US dollars, which can reduce costs and limit the influence of US financial institutions.
##Digital or Other Forms of New Currency Circulation
The BRICS countries are also exploring the use of digital currencies to further reduce their dependence on the US dollar. China, for example, has been developing its central bank digital currency (CBDC) as a way to reduce the use of US dollars in its economy.
The use of digital currencies can provide several benefits, including increased efficiency, reduced costs, and increased transparency. However, there are also risks inherent in the use of digital currencies, such as cybersecurity risks, the potential for fraud and money laundering, and the need for effective regulation.
##Conclusion
The BRICS countries are committed to developing a new currency to reduce their dependence on the US dollar and limit the influence of Western economies on their financial systems. They have already made progress towards this goal by promoting domestic currency settlement and creating a pool of foreign exchange reserves. The use of digital currencies may provide further benefits in reducing dependence on the US dollar. However, there are also risks that need to be carefully considered and addressed.
##FAQs
###1. What is the Contingent Reserve Arrangement?
The Contingent Reserve Arrangement is a pool of foreign exchange reserves that member states of the BRICS countries can use in times of financial stress. This arrangement reduces their need to borrow from Western institutions like the IMF.
###2. What are the benefits of using digital currencies?
Digital currencies can provide benefits such as increased efficiency, reduced costs, and increased transparency.
###3. What are the risks of using digital currencies?
Some of the risks of using digital currencies include cybersecurity risks, the potential for fraud and money laundering, and the need for effective regulation.
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