Odaily Planet Daily News Goldrepublic Content Architect Alexej Jordanov stated that BRICS countries have shown a strong interest in developing a digital currency supported by gold, as part of efforts to reduce dependence on the US dollar in international trade. The article was published Friday by the Official Monetary and Financial Institutions Forum (OMFIF). Jordanov discussed how geopolitical changes (including Russia's exclusion from the SWIFT payment network) have prompted the EU to explore alternative settlement systems. If the proposed single currency is implemented, it could be pegged to gold and a basket of BRICS currencies, with distributed ledger technology (DLT) providing transparency and security. US President-elect Trump stated that if BRICS countries introduce a currency that challenges the dollar's dominance, he may impose a 100% tariff on it. Whether this position will lead to concrete actions after Trump's inauguration remains to be seen. Jordanov explained: “For BRICS countries, a gold-backed digital currency could bring significant benefits. Lower transaction costs and reduced exchange rate volatility are some of the tangible benefits.” He elaborated that BRICS countries account for 40% of the global population and create over 30% of global GDP, slightly higher than the G7. Despite their economic strength, the US dollar still dominates global trade, and the role of BRICS currencies is limited. Intra-BRICS trade has grown by 56% since 2017, accounting for 37% of the total trade volume within the group in 2022. Jordanov believes that implementing a gold-based currency could lower transaction fees and exchange rate risks. The article outlines how the system would work: “By tokenizing gold reserves, each digital unit would be backed by tangible assets stored in secure vaults and audited regularly to ensure accountability. Smart contracts could dynamically adjust currency weights to reflect trade patterns and economic conditions. This would enable real-time settlements, reduce delays, and foster trust among participants. Such a system could even attract countries outside of BRICS seeking alternatives to the dollar-dominated network, potentially increasing the BRICS group's share of global trade to over 18%.” He pointed out that BRICS countries collectively hold 5,700 tons of gold, accounting for 16% of global reserves, while the G7 holds 17,500 tons, accounting for 49%. Jordanov acknowledged the potential benefits but also emphasized the challenges, stating: “Some potential benefits of a gold-backed digital currency are evident, but implementation is not easy. Effective coordination among BRICS countries is needed, along with investment in technological infrastructure. Geopolitical barriers, including potential sanctions and tariffs, further complicate matters. Nevertheless, with their strategic gold reserves and economic influence, the BRICS group may continue to advance the idea of reshaping global finance and provide an alternative to the dollar-centric order.” (Bitcoin.com)