Over the past year, the BRICS emerging economies (including Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates) have made efforts to develop the bloc's common currency.
Now, the final outcome of that work is approaching, as the BRICS currency could be a factor changing the global financial game by 2024, according to Watcher.guru.
Since the beginning of this year, when the five new countries joined BRICS, the de-dollarization plan in the group has been further promoted. The new members are also interested in forming a common BRICS currency to replace the US dollar.
When the BRICS currency is in circulation, the global financial system may face major changes.
Will the BRICS currency be launched in 2024?
Over the past few years, the world has seen BRICS promote geopolitical discussions. BRICS welcomes competitors such as the Western powers as a multipolar world.
BRICS has proven the feasibility of this plan with significant expansion initiatives, adding 5 new members earlier this year.
However, that has not been the main focus of BRICS over the past year. The group has sought to reduce its international dependence on the US dollar. That hope has been met with growing de-dollarization efforts and discussions on creating a common BRICS currency.
This month, BRICS members Russia and Iran announced that they would start using BRICS currencies on the day of launch and eliminate the USD from transactions. Both Russia and Iran are facing US sanctions and are therefore looking to stay away from the US dollar.
The creation of the BRICS Pay system will create more favorable conditions for the development of the common currency.
However, the expected launch date of the BRICS common currency has not been determined. The 16th BRICS summit in October could decide the fate of the common currency.
What does the BRICS common currency mean for the global economy?
The purpose behind creating a BRICS currency is certainly to compete with the USD. That purpose will bring remarkable changes to the entire global financial sector.
The presence of this currency gives countries another commercial payment method, giving opportunities for many smaller countries to avoid using Western currencies, creating increasing diversification in the global economy and benefiting those countries.
When BRICS countries hold this currency, the group's role on a global scale will be maximized. When countries trade with prominent economic pillars such as China and Saudi Arabia, the BRICS common currency will be boosted.
The long-term outlook for the US dollar could be threatened by the BRICS common currency in the future. As BRICS expands, the user network will grow and change the overall monetary balance of power, according to Watcher.guru.
