The BRICS Summit in Kazan was concluded yesterday and one of the major discussions and media frenzy other than war was the BRICS currency. And interestingly, Russian President Putin has revealed a BRICS banknote in the summit.
There are various speculations surrounding the BRICS currency. Some say it will be blockchain-based, while others say it will be traditional. Anyway, the major question remains: When will the BRICS currency be released?
This article will get into the currency-related insights from the BRICS summit, separate the facts from the speculations and rumours, and get into the details of how the currency will be formed and its potential release time.
Is There Really a BRICS Currency?
Let’s make it clear. BRICS has not officially declared that they will use another currency. The plans are still in an ambiguous stage. However, a BRICS banknote was seen in Putin’s hand while he was walking around the summit. After seeing this, the media speculated that a meeting related to BRICS currency was held behind closed doors at the summit.
The banknote that was in Putin’s hand, first got media exposure when it was presented at a BRICS meeting in Pretoria, South Africa on September 2023. Made in Russia, it was presented by the Russian Ambassador to South African Ambassador Ilya Rogachev and to UAE Ambassador Mahsh Saeed al-Hameli. Let us get into its details.
BRICS Banknote Details
According to various sources, it just represents a symbolic banknote, not a real currency. However, the creation of a BRICS currency was active during the founding days and many argued that this banknote is a product of years of planning.
- The Nations: It has flags of Brazil, Russia, India, China, and South Africa on the front and additional nations on the back side. The names of the nations are written in their own language, and all are arranged in a circular pattern.
- The New Development Bank: The currency has “Novo Banco de Desenvolvimento” written on it. It is the Portuguese name for the New Development Bank, a financial institution created by the BRICS nations.
- Cultural Symbols: The currency note has added various cultural icons, including the Taj Mahal of India, the Red Square of Russia, and the Redeemer Christ of Brazil.
Why the BRICS Payment System?
At the summit, Russia emphasized a BRICS-led payment system against SWIFT. As a prominent international financial institution, SWIFT (The Society for Worldwide Interbank Financial Telecommunication) is currently used by 200 countries and major international institutions for money transfers.
The primary currency used in SWIFT is the US dollar, and recently the institution banned various Russian banks. This is one of the reasons for Russia’s response. Also, various accusations have been made against the dollar, which affected its reliability.
BRICS is planning to use mBridge, an Ethereum-based payment system, as an alternative to SWIFT. But it is also not finalized. There is a strong indication that BRICS will use mBridge at least for cross-border payments.
When Will BRICS Currency Arrive?
The plan to create an alternative payment system that helps the global economy to sustain itself will obviously take time. At present, there are no official confirmations from the official sources regarding any dates and not many details about the currency were given to the public.
However, it is confirmed that when the US goes too far in using the dollar as a weapon, it will start a de-dollarization movement. This time we can see the sudden emergence of BRICS-based currency.
Other Key Insights from the BRICS Summit
- The summit presented a document called the Kazan Declaration that emphasizes the need for peace and cooperation.
- Member countries made an agreement to explore BRICS Grain Exchange and BRICS (Re)Insurance Company.
- To collaborate with non-member nations in the activities, the members decided to create a BRICS Partner Country category.
- A new R&D Vaccine Center was sanctioned for the research and development of vaccines.
- India’s International Big Cat Alliance (IBCA), an initiative to save big cats like Tiger and Lion, got recognition.
Final Thoughts
BRICS explore alternative payment methods and implement them only if the situation necessitates it. So, the arrival of a currency depends on various other factors. Putin said they are not rejecting the dollar or fighting against it. But he warns that using the dollar as a weapon will result in its exclusion from the system.
BRICS also aims to accelerate cross-border payments so that people can avoid conversion fees, exchange rates, and mainly the dependency on the dollar. This initiative is named as BRICS Bridge. However, the International Monetary Fund (IMF) has raised concerns that cross-border payment systems will pose risks to the global financial landscape.
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