The BRICS group, which includes Brazil, Russia, India, China and South Africa, has been exploring various strategies to reduce its dependence on the US dollar. One of the most prominent initiatives is the creation of a gold-backed cryptocurrency and the development of a blockchain-based payment system and central bank digital currencies (#CBDC ).
Context and Motivations
The main motivation behind these initiatives is de-dollarization. The BRICS countries seek to strengthen their economic and financial independence and reduce the influence of the dollar in their international transactions.12
Development of BRICS Cryptocurrency
Gold-Backed Currency: There have been rumors and speculations about the creation of a gold-backed BRICS cryptocurrency. Such a currency could challenge the dominance of the US dollar and offer a more stable and secure alternative for international transactions.13
Blockchain-Based Payment System: The BRICS are working on an independent payment system based on blockchain technologies. This system aims to facilitate faster, safer and more transparent transactions between member countries24.
Stablecoins and #CBDC : Russia, in particular, has shown interest in developing stablecoins pegged to the Chinese yuan and other BRICS currencies. In addition, member countries are exploring the use of CBDCs to improve the efficiency and security of their payment systems.24
Implications for the Global Cryptocurrency Market
Impact on #Bitcoin and Other Cryptocurrencies: The creation of a gold-backed BRICS cryptocurrency could have significant implications for the cryptocurrency market. Bitcoin, for example, could be affected due to its decentralized nature and role as an alternative to fiat currencies.13
Competition with the Dollar: If the BRICS cryptocurrency manages to gain traction, it could challenge the dollarâs ââdominance in international trade. This could lead to greater adoption of cryptocurrencies and blockchain technologies around the world.
Conclusion
The BRICS initiative to develop a gold-backed cryptocurrency and blockchain-based payments system represents a significant effort to reduce dependence on the dollar and strengthen the economic independence of member countries. Although still in its early stages, this initiative has the potential to transform the global financial landscape and increase the adoption of cryptocurrencies and digital technologies.
