Russia Discusses the Development of a New Currency in a Bid to Stay Away From the U.S. Dollar

One of Russia’s top officials has claimed that countries in the BRICS alliance, China, Russia, Brazil, South Africa, and India, are working on creating their currency. 

The emergence of this new currency could start a new world order as more economic powerhouses choose to distance themselves from the United States dollar hegemony and move toward creating their currencies. 

The Russian official also claimed these nations understand the importance of their joint participation in working towards a new payment medium and added that creating digital payments could be the most promising and viable route. 

The official also stressed that the existence of the currency would benefit China and other BRICS members and not the Western countries. 

The composition of the currency would be based on the induction of new monetary ties that have been established on a strategy that in no way defends the U.S. dollar or the euro but instead forms a new currency competent of benefiting the shares objectives of the countries in the BRICS in the long run.

The Russian official, State Duma Deputy Chairman Alexander Babakov, also added in his report that the new currency would be secured by gold and other commodities like rare earth materials and elements.

Furthermore, the former chief economist of Goldman Sachs, Jimmy O’Neil, also called on the countries in the BRICS bloc to expand and challenge the power of the dollar. They also add that the U.S. dollar plays far too dominant in global finance.

The concept of creating a BRICS currency is a familiar one, as back in 2019, Cointelegraph reported that members of the bloc were in the throes of discussing the creation of a new digital payment currency to establish a unified payment system.

Earlier this week, China and Brazil reached a deal that would allow them to trade in their currencies. The move will help remove the U.S. dollar as the intermediary currency and further help empower both nations to distance themselves from the world’s reserve currency and strengthen their resolve to create the BRICS currency. 

Also, according to reports, the agreement will further enable China and the largest economy in Latin America, Brazil, to successfully conduct trade and financial transactions directly, without third-party interference. The Chinese yuan will be exchanged straight for the Brazilian real and vice versa instead of going through the greenback and using the U.S. dollar or changing into a different currency. 

Conclusion

If these alliance countries can successfully create this currency, it would take a lot of power from the United States dollars and give these countries more freedom to trade with each other.