The BRICS economic alliance is set to have a vital summit this August, where important decisions should come to fruition regarding its trajectory. As Russia has announced a new BRICS gold-backed currency is coming to fruition, how could it affect Bitcoin? As the asset is currently pointed upward as a currency alternative in its own right.
The Global South’s economic alliance has long explored the idea of an alternative currency. Moreover, as it is now pegged to gold, there will undoubtedly be a negative effect on the US Dollar. Yet, could that negative effect ultimately be good news for the most prominent digital asset on the market?
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BRICS Gold-Backed Currency
With the Summit fast approaching, talks of a BRICS currency have long been discussed. However, in a recent statement, the bloc’s New Development Bank assured that an alternative currency is not in development. Specifically, it instead emphasized a focus on national currency integration and increased usage.
Leslie Maasdorp, the bank’s Vice President, spoke to Bloomberg about the ambitions of the bloc. He stated, “All we are suggesting is that we need to depend on the use of local currencies of our member currencies, and over time, that is going to strengthen our ability to immunize or insulate our economy from the devaluation of our currencies if we borrow in dollars, for example.”
Additionally, Maasdorp clearly spoke against the development of an alternative currency. “But, there is no suggestion right now to create a BRICS currency in that sense,” he remarked. However, it wasn’t until much later that Russia announced that this wasn’t the whole truth.
Also Read: BRICS Confident in New Expansion Criteria Ahead of 2023 Summit
Just days later, Russia did in fact assure that BRICS would be developing a currency that was backed by Gold. Nevertheless, the bloc had embraced the acquisition of the asset, while many assumed it was in preparation for that new currency. Moreover, its eventual arrival could continue the de-dollarization efforts enacted by the bloc over the last several months.
With the summit fast approaching, those talks are likely bound to dominate the discourse. Additionally, there will be talks of expansion for the bloc, which has long been a point of emphasis for its members. However, the discussion of expansion and a BRICS gold-backed currency will have implications for Bitcoin.
What Does It Mean for Bitcoin?
In recent weeks, Bitcoin has seen renewed strength after its abysmal 2022 year. Specifically, this newfound increase is due to a host of Spot Bitcoin ETF filings that have taken place in recent weeks. As asset management firms like Fidelity and BlackRock have sought to have the service be the first of its kind approved by the US Securities and Exchange Commission (SEC).
Also Read: Former SEC Chair Says Bitcoin ETF Should be Approved
Indeed, with the continued discussion of the BRICS gold-backed currency, the US dollar will continue to diminish in value. Moreover, that will only increase the value of Bitcoin as a currency alternative. Subsequently, it will see its overall market importance grow as these two differing realities occur simultaneously.
Bitcoin has no direct connection to BRICS or the US dollar, but it is certainly affected by them. If the SEC does approve a Spot Bitcoin ETF, and BRICS continues its currency development, it will undoubtedly see massive increases. Thereafter, it could greatly benefit from the US dollar’s falling value and its own increasing value.