As the global economy evolves, emerging economies are searching for new ways to better position their financial autonomy and reduce dependence on traditional power structures.
For those reasons, BRICS nations (Brazil, Russia, India, China, and South Africa) are exploring the creation of a common currency to facilitate trade and investment among themselves.
This initiative aims to challenge the U.S. dollar’s dominance in international transactions and promote greater economic integration within the bloc.
This guide will explore the concept of the BRICS currency, its potential value, its implications for global finance, and how it could reshape trade dynamics among member nations.
What is the BRICS Currency?
The BRICS currency is the proposed common currency for BRICS nations.
These nations have created this concept to reduce their reliance on the U.S. dollar in international trade and finance.
Emerging nations have formed a partnership to create a new currency, which will serve as the foundation for new alternatives to existing institutions like the World Bank and IMF.
The motivation behind developing a BRICS currency includes
- Reducing dependence on the U.S. dollar
- Facilitating trade among member states
- Enhancing economic sovereignty for participating nations
Although this currency is not currently available, BRICS leaders have openly discussed creating a gold-backed currency as an alternative to the US dollar.
Overview of BRICS Nations
The original members of BRICS includes Brazil, Russia, India, China, and South Africa.
However, more nations have been added. As of January 2024, the organization has expanded to include new members: Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates.
BRICS nations collectively represent over 3.3 billion people. This accounts for approximately 45% of the global population.
BRICS nations also account for around 30% of the world’s land area and includes some of the largest economies by GDP.
In total, BRICS nations have a combined nominal GDP of about $28.5 trillion, representing roughly 28% of the global economy.
While Saudi Arabia has been invited to BRICS, the country has not formally accepted or declined the invitation.
What is the BRICS currency value?
Because the currency has not been officially released or created yet, its value compared to the U.S. Dollar cannot be properly assessed.
However, gold is expected to play a big role in the currency’s value. One analyst states the currency could be backed by a basket of assets, including:
- 40% gold
- 60% member nations’ currencies
Others claim it could be backed by 100% gold. If this were true, a hypothetical scenario of how the BRICS currency value might work would look like this:
- If 1 unit of BRICS currency = 1 ounce of gold
- And gold price rises to $3,000 per ounce
- Then 1 unit of BRICS currency would be worth $3,000
In this case, the BRICS currency would appreciate against the U.S. dollar as gold prices increase. But, the BRICS currency would likely not operate under a true gold standard.
Unlike a true gold standard, the BRICS currency would not allow direct exchange for physical gold at central banks.
Its value would also fluctuate with gold prices in the dollar gold market.
BRICS Currency Name and Release Date
As of January 2025, there is no official name or release date for a BRICS currency. In fact, the BRICS nations have yet to formally announce the creation of a common currency.
There have only been rumors and speculations surrounding the currency rather than an official announcement.
However, BRICS has openly discussed their focus on alternative financial initiatives.
This includes:
- Multi-currency system: BRICS is developing a “multi-currency system” that encourages the use of member nations’ local currencies for trade and investment.
- BRICS cross-border payment initiative (BCBPI): This system aims to facilitate transactions using national currencies rather than the U.S. dollar.
- BRICS clear: A proposed independent cross-border settlement and depository infrastructure to promote local currency usage.
Some sources have speculated about the currency being named the “Unit,” but this is unofficial.
Russian President Vladimir Putin has stated that the time for a common BRICS currency “has not yet come.”
How do I buy the BRICS currency?
At this time, no official BRICS currency is available for individuals or businesses to acquire. Because the currency is still in the planning and development stages, it’s impossible to obtain.
However, you can potentially participate in this evolving financial ecosystem by:
- Conducting business transactions with BRICS nations using their local currencies.
- Staying informed about developments in BRICS financial cooperation initiatives.
- Exploring opportunities related to the upcoming BRICS payment platforms and systems as they become available.
But remember, many of these initiatives are still in development. Their implementation timeline may change depending on what the BRICS nations want to accomplish in the coming years.
Global Impact of a BRICS Currency
The potential introduction of a BRICS currency could have significant global impacts. Most notably, it could disrupt the international financial system and the dominance of the U.S. dollar.
Here are a few reasons this currency could have a significant global impact.
Eliminating exchange rate risks
By adopting a common currency, BRICS nations would eliminate exchange rate fluctuations within the bloc. This would provide a more stable environment for businesses operating across these countries.
It would also remove the U.S. Dollar from trade activities between these countries.
For instance, companies engaged in long-term contracts or investments would no longer need to worry about potential losses due to unfavorable exchange rate movements between BRICS currencies.
Reducing transaction costs
Implementing a unified BRICS currency would substantially decrease transaction expenses for trade and investment within member countries.
Today, currency conversion and the associated fees are required for international trade. A common currency would eliminate these costs, speed up the process, and make it more cost-effective.
De-dollarization
The U.S. dollar currently accounts for approximately 88% of global currency trading. For decades, it has been the primary currency for international transactions.
Until recently, nearly all oil trading was conducted in dollars. Adopting a BRICS currency would decrease the dollar’s demand in international trade.
Not only that, but BRICS nations collectively control 42% of global central bank foreign exchange reserves.
This would allow BRICS nations to influence global currency markets and shift away from dollar-denominated assets.
Will the BRICS currency defeat the U.S. dollar?
The proposed BRICS currency represents a significant shift in the global economy and the potential dominance of the U.S. dollar.
While its implementation still seems like a long-term plan, it’s worth monitoring as the BRICS nations continue to develop.
