Gold-Backed BRICS Currency
The subject of a common BRICS currency has gained significant attention as the BRICS leaders’ summit approaches and an increasing number of countries pursue de-dollarization. The BRICS comprises Brazil, Russia, India, China, and South Africa. Their leaders’ summit will take place in South Africa from Aug. 22 to 24.
Key Points:
- The BRICS countries are planning to introduce a new trading currency, which will be backed by gold.
- More and more counties recently express desire to join BRICS.
- The tweet by the Russian Embassy in Kenya links to an article published on April 24 discussing the BRICS potentially backing its common currency with gold.
- The BRICS Bank does not have an immediate plan to create a common currency to challenge the dominance of the USD.
- The focus remains on enhancing the respective national currencies within the BRICS framework.
Hot Take:
While the idea of a gold-backed BRICS currency has gained attention, it appears to be a medium to long-term ambition rather than an immediate plan. The BRICS Bank and India’s External Affairs Minister have both emphasized the focus on strengthening national currencies within the BRICS framework. While the desire to reduce reliance on the U.S. dollar is evident, the establishment of a common currency is still a distant goal. The BRICS nations are exploring alternatives, but for now, the priority is to deepen the use of local currencies and strengthen their economies.
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