BRICS currency: ready to revolutionize the global financial system in 2024

In the last twelve months, the BRICS alliance has worked intensively to create its own valuta nativa. Now, the fruit of this effort is about to materialize and could revolutionize the global financial landscape in 2024.

Let’s see all the details below. 

The new BRICS currency: what it is and what changes it will bring

As anticipated, over the course of the last year, l’alleanza BRICS has been working on the development of its own currency. This effort could soon come to fruition and significantly alter the global financial landscape in 2024.

At the beginning of this month, Russia and Iran confirmed their collaboration on a currency project of the BRICS, confirming the rumors that were already circulating before the 2023 annual summit.

With the launch of the currency expected this year, radical changes are anticipated in global finance. In recent years, the BRICS alliance has been at the center of geopolitical discourse, promoting a multipolar world and competing with Western powers.

It has indeed demonstrated the feasibility of this objective through significant expansion initiatives. 

Tuttavia, nell’ultimo anno, il gruppo ha concentrato i suoi sforzi sulla riduzione della dipendenza dal dollaro USA, avviando processi di de-dollarizzazione e discutendo la creazione di una valuta nativa.

This month, the Iranian officials confirmed the collaboration with Russia on this project, aimed at developing a currency to be used in trade exchanges between the member countries.

During the last year, the group has frequently mentioned this project. Moreover, the creation of the BRICS Pay system has increased interest in the release date of the currency. 

It is likely that the project will be presented at the annual summit of 2024, scheduled for October.

The summit of 2023 was the stage for the announcement of the expansion of the bloc. Now, it is expected that the summit of 2024 will be the moment when the native currency of the BRICS will finally be unveiled, with potentially enormous implications for the global economy.

The challenge to the dominance of the US dollar

The creation of a BRICS currency has the declared intent of reducing the dependence on the US dollar internationally, with the goal of inducing significant changes in the global financial sector.

Questa nuova valuta offrirà alle nazioni un’alternativa per i regolamenti commerciali, consentendo a molti paesi più piccoli di evitare l’uso delle valute occidentali. 

The simple existence of the BRICS currency will favor a greater diversification in the global economy, bringing benefits to many nations.

With the growing adoption by BRICS nations, the role of the new currency on a global level will become increasingly relevant. Countries like China and Saudi Arabia, important economic pillars, will encourage the use of the BRICS currency in trade relations.

Long-term prospects for the US dollar are threatened by the creation and implementation of the BRICS currency. 

Although it may face an initial phase of adjustment, it is expected that in the coming years the new currency will continue to influence the way countries conduct commercial transactions. 

With the expansion of the blocco, the network of users will grow, shifting the balance of global valutario power.

Possible international competition?

As mentioned, in the context of de-dollarization efforts, the BRICS bloc has adopted blockchain technology to develop a new payment system.

The United States, on the other hand, might attempt to counter the currency plans of the BRICS to protect the dollar in the long term.

According to a report by Reuters, the global payment system SWIFT is working on developing a platform for a central bank digital currency, expected in the next one or two years. 

Tuttavia, la piattaforma SWIFT ha affrontato opposizione da parte dei BRICS a causa dei suoi legami con l’Occidente e gli Stati Uniti. Questo potrebbe portare a una international competition tra il nuovo sistema di pagamento dei BRICS e quello di SWIFT.

The sistema di pagamento SWIFT, gestito dall’Occidente, vede nel sistema BRICS il suo più grande concorrente. L’incursione dei BRICS nelle valute digitali potrebbe diventare un punto chiave di contesa mentre cercano di ridurre la rilevanza globale del dollaro USA.

The intervention of SWIFT seems like an attempt to compete in a market so far dominated by the BRICS bloc. 

This happens while central banks around the world are trying to diversify their reserves, acquiring gold to protect themselves from a potential collapse of the US dollar.

Sebbene il dollaro rimanga la riserva globale, l’aumento del debito degli Stati Uniti mette in dubbio la sua sostenibilità a lungo termine. 

Therefore, the move by SWIFT represents an opportunity to intensify competition with the BRICS in an evolving financial context.