Previously, Russia and India revealed their plan to accelerate their vision toward a joint “digital economy.” This development further fueled speculations of the BRICS developing a common currency. Today, on January 30th, Iran has reportedly opened talks about the matter in a meeting with other BRICS members.
The New BRICS Members
BRICS was originally composed of Brazil, Russia, India, China, and South Africa — hence, the acronym. After more nations showed interest in joining the alliance last year, it expanded its membership to include Iran, the UAE, Egypt, Ethiopia, and Saudi Arabia on January 1, 2024.
As a side note, Argentina was among the countries that have shown an intention to join the group. However, the change in its leadership to President Javier Milei resulted in the country backtracking from its plan.
BRICS Digital Currency
One of the newest inductees, Iran, proposed focusing the agenda of the BRICS on the banking and payments sectors in the organization’s opening meeting this morning. The Middle Eastern superpower implied the importance of arriving at a common currency during the discussion.
“In the plans of 2024, I hope that these economic and financial pillars, especially banking and financial issues, payment systems, digital currency, common currency, exchanges with national currency, etc., will speed up and become operational,” stated Iran’s BRICS representative who was referred to as a “sherpa” by Ledger Insights.
However, Iran’s proposal was rebuffed by Russia’s Deputy Foreign Minister Sergey Ryabkov. Citing a consensus reached during the 2023 BRICS Summit, he said, “According to the leaders’ decisions in Johannesburg, we will look into the ways how to enhance the use of national currencies, that is local currencies, payment instruments and platforms, in our cross-border transactions in order to reduce the negative spillovers of the current dollar-dominated global economic system.”
For context, Ryabkov’s “payment instruments” reference allegedly pointed to the earlier negotiation between Russia and Iran regarding the use of gold-backed tokens.
Fear of BRICS Joint Currency
The idea of a common digital currency for BRICS could definitely benefit member countries that want to reduce or eliminate their dependency on the US dollar for international trade. But then again, it would go against their initial goal of promoting each member’s local currencies. Nonetheless, US politicians were, obviously, none too pleased with the current composition of the BRICS.
With its revamped lineup, there are now two BRICS members which are under the sanctioned list of the US. Senator Marco Rubio warned that the present trajectory of the group could undermine the economic sanctions imposed by the Western superpower for nations operating against its foreign policy or national security.
“If current trends continue, it will become harder and harder for the United States to prevent international violence and oppression through sanctions,” the American politician cautioned during a recent Senate hearing.