The Russian civil war comes at a time when the country is preparing for the formation of a BRICS currency. The military tension is creating a stir in the BRICS bloc as the soon-to-be-released currency is put under the scanner. The new currency could fail if Russia is infighting an insurrection and the tender could be tainted during its launch on the global stage. This might make other countries maintain distance from the BRICS currency as the tender would not be considered safe.
The development could give the U.S. dollar an upper hand as the BRICS bloc could lose its way during the formation of the upcoming currency. The tender could lose its value in the global markets if the insurrection repeats leading to a decline in value. Therefore, developing countries holding BRICS currency as reserves remain at risk much bigger than those holding the U.S. dollar.
Russia’s Civil War Could Taint BRICS Currency
The series of developments in Russia could taint the soon-to-be-released currency even before launch. Therefore, the aim of de-dollarization might be wishful thinking if the currency loses the trust of a handful of nations.
Russia was on the brink of a civil war after Wagner Group caused an uprising, threatening Vladimir Putin’s presidency. The head of the Russian mercenary group Yevgeny Prigozhin has now been ordered, to be transferred to Belarus, and criminal charges has been dropped. However, his fate remains uncertain.
The armed group marched through Rostov and was heading toward Moscow before the uprising was called off.
BRICS is an acronym for Brazil, Russia, India, China, and South Africa. The next summit will be held in South Africa in August. The bloc of five nations will decide on the formation of a new currency to take on the U.S. dollar.