The spokesperson for BRICS hailing from Russia has talked about a new digital currency project at the next summit in South Africa. The focal point of the statement is a new financial system that can be used as a bypass for the dollarization standard in international trade.
To this end, legislatures in Brazil, Russia, India, and China have taken some steps to adopt the alternative financial network. Duma Alexander Bobakov has recently shared insights about the Russian-Indian strategic partnership. He was attending the forum in New Delhi as Deputy Chairperson.
The main aim of this alliance which contains Brazil, Russia, India, China, and South Africa (BRICS) has the mandate to form a new international trade network that does not depend on USD.
To this end, Bobakov has claimed that the first stage to make these changes happen is ensuring the issuance of a digitized currency format in partner nations.
He also claimed that the willingness to go ahead with the project will be displayed at the next BRICS summit. Thus far the official agenda for the next BRICS meeting is not publicized.
The Next BRICS Summit will Take Place in South Africa to Discuss the Digital Currency Transition
The total population of the BRICS alliance accounts for 40% of the total world population and makes up for ¼ of international GDP production. Meanwhile, other countries such as Iran and Saudi Arabia are also set to join the alliance.
On the other hand, 10 other nations such as Egypt, Mexico, UAE, Algeria, Nigeria, and others have also hinted about their interest in joining. Bobakov noted that the new digital currency standard will not be pegged to the value of USD or Euro but it will take support from gold and other commodities such as rate minerals and soil-based products.
Some areas of these trades are already in a pilot stage. China and Brazil announced on 29th March that the nations were conducting trade with each other using their national currencies and bypassing USD as an international medium of exchange. Other nations to use the alternative financial network are Iran and Russia.
They have connected their interbank communications network namely SEPAM and SPFS. This banking network serves as the counterpart for the SWIFT banking network offered by the US. Iran was barred from SWIFT in 2018 while Russia was banned in 2022 on account of the Ukraine war.
The financial restrictions imposed by US and EU nations on countries like Venezuela, Iran, Afghanistan, and Russia have triggered a $300 billion global alert. These data projections are issued by the Tricontinental Institute of Social Research named Marco Fernandes.
Speaking on the matter, Russian President Vladimir Putin has claimed that the trade volume between Russia and China has increased by 30% since last year.
At the first summit of the China-Gulf Cooperation Council or GCC in 2022, a Chinese representative claimed that it has plans to import more crude oil, LNG, and other petroleum products from GCC nations and settle these trades using Yuan.
Another national alliance to work towards de-dollarization is ASEAN or the Association of Southeast Asian Nations. BRICS has plans to introduce other financial alternatives in the form of NDB or New Development Bank which is a substitute for the World Bank, IMF, and Bretton Woods Institutions. Bangladesh, Egypt, and UAE have joined as the newest members of NDB in addition to the current BRICS nations.
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