Naledi Pandor, South African Foreign Minister say that the BRICS alliance plans to launch a new world currency. The goal of these countries with their own currencies is to completely decouple themselves from the US dollar. The group of countries includes Brazil, Russia, India, China and South Africa.
There have been many rumors lately that countries such as Saudi Arabia, Iran and Turkey also want to join the whole.
Stand on your own feet
It seems mainly a matter of confidence for the BRICS alliance. They have, of course, seen with their own eyes how Russia’s reserves were frozen at the touch of a button in the traditional financial system. To prevent them from facing similar treatment in the future, many countries are now working on alternatives.
In the list you can see that it mainly concerns countries that are generally somewhat tense with the United States. Russia and China in particular are not friends of the Western superpower.
“Are they saying we can’t trade in our own currency? Why do we have to use the dollar? South Africa has an internationally traded currency. But we have a lot of debt in dollars, so we have to approach this in a responsible way,” said Minister Pandor.
For the time being, however, it seems to be a plan and there is still little concrete on the table. Pandor also indicates several times that there is still a lot to be discussed between the countries. On the other hand, that can also be a smoke screen, to make the West think that they are not that far yet.
Will it work?
Minister Pandor indicates that they still have to see whether the idea really has a chance of success. “I don’t think we should completely assume that the idea works, because economics is a tricky subject and you have to take into account a whole group of countries,” said Pandor.
It is also questionable whether such a new currency will not cause a kind of splitting of the world. Where you have the West on one side and the BRICS alliance on the other.
Confidence in the BRICS currency will also not be high from the West, so there may be less trade between the two blocs. That seems like a situation that is not good for anyone.
Perhaps Bitcoin can provide part of the solution by being a currency that can be trusted by both blocks. After all, you don’t have to rely on the systems of the West or the BRICS countries to send and receive Bitcoin.