The BRICS alliance has been working on developing its own currency for the past year. The end result of this effort is now imminent and could represent a turning point in global finance in 2024.
Both Russia and Iran confirmed cooperation on the BRICS currency project earlier this month. This confirms ongoing rumors about such plans, which first surfaced ahead of the 2023 annual summit. The issuance of this currency is likely scheduled for this year, and global finance could face major changes.
Will BRICS currency be introduced in 2024?
The BRICS alliance has dominated the geopolitical debate in recent years. The group has firmly embraced rivalry with the West in its pursuit of a multipolar world. Additionally, the company has demonstrated the feasibility of this plan with significant expansion initiatives.
However, this was not the main focus of the partnership last year. Alternatively, the group has sought to reduce international dependence on the US dollar. This desire was met by intensifying de-dollarization efforts and discussions about creating an independent his BRICS currency.
This month, Iranian officials confirmed that the country is working with Russia on such a project. The BRICS expansion countries and Moscow cooperated in developing a currency that all member states could use in unilateral trade transactions.
The group has spent much of the last year focused on this project. Moreover, with the creation of the BRICS payment system, the intrigue regarding the date of issue of this currency has become even greater. The project is therefore likely to be presented at the 2024 annual summit in October.
The 2023 Summit was the site of a monumental expansion announcement for the bloc. This should now be where the block finally announces its national currency. Furthermore, this currency can have a significant impact on the entire global economy.
What it means for the world economy
The intention behind the creation of the BRICS currency is undoubtedly to counter international dependence on the US dollar. This objective should lead to significant changes across the global financial sector.
The existence of such a currency provides nations with another asset with which to conduct trade. In fact, this gives many small countries the opportunity to avoid using Western currencies. Their very existence leads to the diversification of the world economy, which benefits these countries.
If these BRICS countries adopt this currency, their role at the global level will only be maximized. As countries foster trade ties with major economies such as China and Saudi Arabia, they are being forced to use their newfound currencies.
The long-term prospects of the US dollar are seriously threatened by its creation and adoption. Although we are seeing an adoption curve, this currency is likely to continue to transform the way countries trade in the coming years. As the block expands, the network of users grows and the overall balance of power in the currency changes.