The BRICS alliance will decide on the formation of a new currency at the next summit in South Africa in August. The currency is touted to take on the U.S. dollar and challenge its supreme status as the global reserve. BRICS members China and Russia are desperate to dethrone the U.S. dollar and make way for their local currencies or BRICS tender to take the international stage.
However, the soon-to-be-released BRICS currency is already facing hurdles a month before the scheduled summit in Johannesburg. The idea of the formation of a new currency now requires consent from many parties and faces implementation challenges.
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BRICS Currency Faces Implementation Challenges a Month Before Summit
The Governor of Russia’s Central Bank Elvira Nabiullina said at a press conference that the formation of a new BRICS currency requires the consent of many parties. While the Governor said that the currency “deserves attention” she stressed that the groundwork to launch the currency is yet to be framed.
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Apart from the currency, the payment infrastructure is yet to be put into place. She called the new BRICS currency a challenge that would require months of preparations and number-crunching analytics. “This is not a simple project at all,” she said to reporters at St. Petersburg.
The Russian Central Bank Chief’s statements stand in contrast to Putin and China’s Xi Jinping’s goals. Putin and Jinping are convincing other nations to trade in the new currency as if it already exists. The duo are blind to the hatred of the U.S. and the dollar and are going to any lengths to destabilize the currency.
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On the other hand, India might back out from the formation of the BRICS currency as it finds it to be unfeasible. India’s Foreign Minister S. Jaishankar hinted at a press conference that India is not interested in the new currency. He said the Modi government is focused on making its native currency, the Rupee stronger and not the BRICS tender.
Read here to know why India is skeptical about China and Russia’s power prowls to take on the U.S. dollar. India is the only BRICS member that could do well even without being a part of the bloc.