With discussions surrounding the BRICS currency continuing through the next year, questions have arisen over whether or not the currency could be a digital asset or a gold-backed alternative altogether. Moreover, the expectation is that the currency could be announced at the 2024 annual summit.
This year’s summit saw BRICS unveil a six-country expansion plan. Now, the economic alliance is poised to continue its trend of landmark announcements, with its currency being unveiled in 2024. However, the mechanics of such a currency remain a question amid the project’s development.
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Could BRICS Currency be a Digitized Local Currency or a Gold-Backed Alternative?
The BRICS economic alliance has seen tremendous growth throughout the year thus far. Indeed, that culminated in a six-nation expansion effort. Specifically, the bloc invited Saudi Arabia, the United Arab Emirates (UAE), Iran, Egypt, and Ethiopia into the alliance. Although it had also invited Argentina, the nation is seemingly set to reject the invitation.
Now, many expect that the alliance will introduce a BRICS currency, leading many to ponder if it will be a digital asset or a gold-backed alternative. Both options have been discussed by the bloc and present differing alternatives. As the 2024 summit could be the setting for an announcement, the project should be well underway.
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A BRICS currency wouldn’t require a unified fiscal policy or bond market, says Investing News Network. Moreover, the currency could be tied to a specific weight in gold, the report concurred. Therefore, it would have a fixed value that was unified.
Conversely, the BRICS bloc has been hard at work developing its digital asset presence. Although gold is certainly an option, so too is connecting local currencies through blockchain technology and digitalization. China has already seen impressive use of its digital yuan. Specifically, a massive oil deal was recently settled in the currency, presenting a use case that could be extended.
Ultimately, a BRICS currency is likely to be established, with the project’s specifics remaining. Moreover, the two options present realistic avenues for the endeavor, with its de-dollarization potential remaining for both options available.