- The BRICS summit is underway and the coalition has been suggesting a new payment system that isolates the U.S. Dollar.
- The bloc has confirmed new members will include UAE, Egypt, Ethiopia, Saudi Arabia, and Argentina.
The highly anticipated BRICS summit is underway in South Africa with all member countries participating. On the last day today, the members have made their agendas clear. The members who are made up of Brazil, Russia, India, China, and South Africa have made de-dollarization one of their main agendas.
The bloc, like a majority of countries in the world, is seeking a way to reduce their reliance on the dollar both as a reserve currency and to settle international trades. Although the bloc is working on establishing a new payment system and possibly a new currency that could be backed by gold, it has in the ongoing summit announced some measures that will strengthen the alliance and build the foundation for a new financial system. Reuter reports that the BRICS Bank also known as the New Development Bank (NDB) plans to issue its first Indian Rupee Bond by October.
BRICS Bank’s Vice President and Chief Operating Officer Vladimir Kazbekov revealed that the bank is under pressure to raise and lend more in local currencies.
NDB is seeking to increase its presence in the local capital markets of its member countries, to fund its robust portfolio of local currency loans,
This has already been tested after the bank issued its first South African rand bond last week when it revealed that this would be expanded to other member countries. As planned, this takes the bloc one step closer to de-dollarization.
Another major achievement has been its bilateral trade which has been completed in local currencies. Leading in this front are China and Russia whose trade has primarily been settled in local currencies. Arguably, both have a greater interest in the weakening of the dollar than the rest of the bloc. As CNF reported earlier in the month, India was also successful in buying crude oil from the UAE, paying for the 1 million barrels acquired in India Rupees.
There have since been rumors that the Organization of the Petroleum Exporting Countries (OPEC) members are threatening to sell their oil in currencies other than the dollar. However, this is something that the UAE admits cannot be changed overnight.
BRICS Expands to Include New Member Countries
In the latest development from the BRICS summit, the alliance has confirmed its expansion with the addition of five new member countries. The states include UAE, Egypt, Ethiopia, Saudi Arabia, and Argentina.
BREAKING: BRICS announces new members as:
🇦🇷 Argentina
🇪🇬 Egypt
🇪🇹 Ethiopia
🇮🇷 Iran
🇸🇦 Saudi Arabia
🇦🇪 UAE— World of Statistics (@stats_feed) August 24, 2023
The new addition adds another layer of complexity to the bloc. It is a clear indication of the bloc’s ambition to dethrone the West and bring a power shift in the world.
Although it remains unclear the stance of the bloc on digital assets and in particular leading payment infrastructures offered by projects such as Ripple through XRP and Bitcoin (BTC), the community remains optimistic that the alliance embraces the new technology.
The bloc can utilize the cutting-edge technology offered by leading projects such as Ripple, Ethereum, and Cardano. In such an event, digital assets could be utilized to settle international trade and/or launch CBDCs using blockchain technology. This would drive mass adoption and drive prices of cryptocurrencies to new all-time highs in the long term.
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