History of Brics currency

The idea of a BRICS currency or a common currency for the BRICS countries (Brazil, Russia, India, China, and South Africa) has been discussed for many years but has not yet materialized. The concept gained traction as a potential alternative to the dominance of the US dollar in global trade and finance.

The BRICS countries, representing a significant portion of the world's population and GDP, have sought to increase their influence in global financial markets and reduce their dependence on Western currencies. In 2010, at their summit in Yekaterinburg, Russia, the BRICS leaders discussed the possibility of creating a common reserve currency. However, concrete steps towards implementing such a currency have been limited.

One notable development in this regard was the establishment of the New Development Bank (NDB) by the BRICS countries in 2014. The NDB, often referred to as the BRICS Bank, aims to finance infrastructure and sustainable development projects in emerging economies. While the NDB does not issue a common currency, its creation reflects the desire among BRICS countries to strengthen their financial cooperation.

Another initiative was the launch of the Contingent Reserve Arrangement (CRA) in 2015. The CRA is a framework for providing emergency liquidity assistance to member countries facing balance of payments problems. It aims to reduce the reliance on the International Monetary Fund (IMF) for such assistance and enhance financial stability among BRICS nations.

Despite these developments, the idea of a common currency for the BRICS countries remains speculative. Challenges such as divergent economic structures, exchange rate policies, and political differences among member states have hindered progress towards this goal. Additionally, the global financial system is deeply entrenched in the use of established reserve currencies like the US dollar, euro, and Japanese yen, making it difficult for a new currency to gain widespread acceptance and credibility.