KAZAN – Recent discussions at the BRICS summit in Kazan, Tatarstan, could set the stage for a new era in the global financial landscape. The debate around a common currency, supplemented by digital payment systems like BRICS Pay and cryptocurrencies, marks a potentially historic turning point in the international economic order.

The BRICS countries—Brazil, Russia, India, China, and South Africa—have joined forces to create an alternative to the US dollar’s dominance. New members include Iran, Egypt, Ethiopia, and the United Arab Emirates.

The introduction of a common currency would strengthen economic cooperation within the bloc and reduce dependence on the US dollar. This step could enhance trade within the group and improve its global financial position. However, developing such a currency is complex and requires careful consideration of the economic and political implications. The BRICS states face the challenge of balancing national interests with the shared goal of greater economic independence.

Experts are divided on the feasibility of a common currency. While some highlight the benefits of such an initiative, others point to the difficulties associated with integrating diverse economic systems and monetary policies. The New Development Bank (NDB) of the BRICS countries could play a key role in implementation by offering favorable loans without ideological conditions, thus providing an attractive financing alternative.

The launch of BRICS Pay and the discussion of crypto offerings demonstrate the BRICS states’ ambition to leverage modern financial technologies and establish their own payment system. This could enable greater financial inclusion and improve the efficiency of cross-border trade. The platform is also open to non-BRICS countries, offering an alternative to the SWIFT system, which could further shift global trade dynamics.

Geopolitical tensions and current economic challenges make discussing a BRICS currency particularly relevant. The initiative could reshape power dynamics in the global financial system and lead to a more diversified and potentially fairer economic order. However, the future of the project depends on many factors, including political will among the BRICS states and the response from the international community.

The BRICS countries have already taken initial steps to increase their independence from the US dollar. For instance, China has stopped conducting 50% of its global trade volume in US dollars, significantly impacting the agricultural sector in Western countries. Russia and Turkey have agreed to conduct their trade in local currencies, with Turkey now allowed to pay in rubles while Russian companies can pay in Turkish lira.

The decision for or against a common BRICS currency will have far-reaching consequences, not only for the countries involved but also for the global economy. The discussions at the summit in Kazan could mark the beginning of a new chapter in the history of international financial relations. (zai)