In a recent interview with the Financial Times, the man who coined the BRICS name, Jim O’Neill, called the idea of a new currency “ridiculous.” Subsequently, he did maintain that the quest for de-dollarization wasn’t fruitless for the bloc. Stating that for the BRICS bloc, India and China’s alignment is crucial for any kind of currency development.
Although O’Neill did not hold back his thoughts regarding a BRICS native currency; he also presented a way it could work. In the interview, O’Neill touched on the untapped potential of the bloc. Indeed, noting that they may already have all they need for their de-dollarization hopes.
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BRICS Currency and De-Dollarization Require India and China
The BRICS bloc is set to approach its most important gathering since its inception. Indeed, the bloc is poised to take part in an annual summit with massive implications. In discussions over local currency usage and expansion, its vitality cannot be understated.
One facet of those discussions has long been thought to be a BRICS common currency. However, the economist who penned the name, Jim O’Neill, recently discussed his thoughts on the idea. Calling it “ridiculous” in an interview, going as far as to say, “It’s embarrassing almost.”
However, O’Neill did also discuss why it might be appropriate. Stating that the BRICS bloc required India and China for any currency development. Whether that be a common currency or local currency promotion, O’Neill noted that the two countries have all they need to de-dollarize the majority of the world.
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“It’s a good job for the West that China and India never agree on anything, because if they did, the dominance of the dollar would be a lot more vulnerable,” O’Neill stated. Ultimately, O’Neill is referencing ongoing tensions between the countries, tensions that have long been seen as a roadblock to the economic alliance.
However, O’Neill is undeniably correct in his assertion. For the BRICS bloc to embrace local currencies or develop a trade currency, it needs to first address India-China relations. These countries have two of the highest economic growth rates in the world. Their unified position could be massively important to the alliance’s trajectory.