A Trace Finance analyst has suggested that the BRICS nations could launch a single digital currency issued and regulated by the New Development Bank, also known as the BRICS Bank. He stressed that the U.S. is facing the biggest crisis in history. Many expect a common BRICS currency that would challenge the dominance of the U.S. dollar to be discussed at the economic bloc’s summit next week.
Analyst Discusses BRICS Digital Currency
Evandro Caciano, head of FX at Trace Finance, discussed the prospect of the BRICS nations launching a digital currency in an interview with CNN Brazil, published Friday. The economic bloc comprises Brazil, Russia, India, China, and South Africa. Nothing that the U.S. dollar is no longer as safe as it once was, he cautioned (translated by Google):
We are in the biggest American crisis in history. It is a crisis of fundamentals, with ratings downgraded by credit agencies, putting the dollar in check.
Many people expect the topic of a common BRICS currency to be discussed at the economic bloc’s upcoming summit that will take place on Aug. 22-24 in Johannesburg. However, South Africa’s diplomat in charge of BRICS relations has said that the topic of a common currency is not on the summit agenda.
Experts have suggested that one of the ways to make a common BRICS currency viable would be through a digital currency, similar to a central bank digital currency (CBDC). Caciano opined:
It would be possible to have a single digital currency for the bloc, issued and regulated by the BRICS Bank.
However, Caciano believes that the creation and implementation of this currency would take years and could happen in phases. “The adoption of a digital currency throughout the BRICS is a project of at least five to 10 years,” he stated.
Leslie Maasdorp, vice president and chief financial officer of the New Development Bank, also known as the BRICS Bank, similarly stated recently that the development of anything alternative to the U.S. dollar is a “medium to long-term ambition.”
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