BRICS discusses plans for common cryptocurrency to reduce USD dependence
Today, its fair to say that many countries across the globe are looking at the prospect of alternatives to the present-day monetary system. Cryptocurrencies have emerged as one of these options lately, with many countries taking steps towards embracing and even adopting cryptos, or at the very least, its underlying technology. The BRICS nations latest meeting seems to have doubled down on the idea of embracing these digital currencies.
According to a report, BRICS, a group of nations constituted by Brazil, Russia, India, China, and South Africa, recently discussed the development of a common payment system, a network that could perhaps emerge as a competitor to SWIFT.
According to Kirill Dmitriev, Head of the Russian Direct Investment Fund [RDIF],
An efficient BRICS payment system can encourage payments in national currencies and ensure sustainable payments and investments among our countries, which make up over 20% of the global inflow of foreign direct investment.
Additionally, Dmitriev called for the integration of the BRICS nations national payment systems, to increase non-market risks of the global payment infrastructure.
Whats more interesting, however, is the fact that the member states also contemplated the idea of a common cryptocurrency. And while the minutes or observations of the meeting havent been released yet, the fact that a common cryptocurrency was discussed is a huge deal.
United States and the U.S dollar monopoly
The United States has been very vocal about its concerns regarding CBDCs over the past few months now. Not just CBDCs, but U.S lawmakers and policymakers have even discredited the benefits offered by cryptocurrencies as a whole.
On the other hand, China has been increasingly pro-active with its development of its own CBDC, especially after President Xi Jinping publicly expressed his support for blockchain technology. According to many, the need to circumvent the dominance of the U.S Dollar in the global economy is what drove the Chinese to develop their own digital currency, one backed by the PBoC.
However, China isnt the only country that seeks a way out of the U.S Dollars hegemony. In fact, support for a non-USD cryptocurrency is growing by the day. For instance, Bank of Englands Mark Carney has been outspoken about the same, stating that a central bank supported digital asset may replace the U.S dollar as a global hedge.
In fact, Beatrice Weder di Mauro, President of the Centre of Economic Policy Research, had even claimed that European central banks could band together to issue a CBDC of their own to a) Counter the hegemony of the U.S Dollar and, b) To stop Libra and Chinas CBDC from diverting Euro supply, very similar to the concerns aired by Bank of Frances Denis Beau last month.
Proponents of the crypto-ecosystem pitched in too, with Krakens Jesse Powell commenting that maybe, the United States is against the idea of CBDCs b ...