A new world order may emerge as economic powers step up their efforts to break away from the hegemony of the US dollar.
According to reports, a top Russian official has claimed that the BRICS alliance is working on creating its own currency. BRICS is an acronym for five major emerging economies: Brazil, Russia, India, China and South Africa.
Alexander Babakov, deputy chairman of the State Duma, made the remarks in St. Petersburg. According to local reports, the St. Petersburg International Economic Forum event in New Delhi, India.
Babakov reportedly stressed the importance of both countries working on a new medium for payments, adding that digital payments could be the most promising and viable.
He also said that the currency could benefit China, other BRICS members, and not the West.
“Its structure should be based on the establishment of a new monetary relationship founded on a strategy that does not protect the US dollar or the euro, but establishes a new currency that benefits our shared objectives.”
Babakov reportedly also believed that the new currency would be backed by gold and other commodities, such as rare earths.
This week Jim O’Neill, former chief economist at Goldman Sachs, called for the BRICS bloc to enhance and challenge the dominance of the dollar. “The US dollar plays a much more dominant role in global finance,” he wrote in a paper published in the journal Global Policy.
BRICS currency is not a new concept. In 2019, Cointelegraph reported that members of the bloc were discussing the creation of a new digital currency for a unified payment system.
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In a related development this week, China and Brazil reached an agreement to trade their currencies. The move would remove the US dollar as the middleman, allowing both countries to move away from the world’s reserve currency.
According to reports, the agreement will allow China and Latin America’s largest economy, Brazil, to conduct their trade and financial transactions directly. The Chinese Yuan is exchanged directly for the Greenback against the Brazilian Real and vice versa.
China is moving forward with its CBDC project, and Brazil’s crypto adoption is gaining momentum following its legalization as a payment method in the country late last year. Meanwhile, Uncle Sam is determined to continue his war on crypto as financial regulators tighten the noose on the embryonic industry.
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