In the past few months, we have seen that the launch of Facebook’s coin Libra acted as a wake-up call for various countries, and some even decided to develop their digital currencies. The countries have agreed to create these cryptocurrencies to encourage the usage of centralized digital currencies by people instead of moving to alternates like Bitcoin and other decentralized cryptocurrencies.
BRICS to create a cryptocurrency
BRICS is the group of five significant nations- Brazil, Russia, India, China, and South Africa that have decided to create a cryptocurrency that would be used for settling payments between the countries. This proposal was revealed by Kirill Dmitriev, the CEO of the Russian Direct Investment Fund (RDIF), which is a $10 billion sovereign wealth fund that is formed by the Russian Government.
The member nations forming BRICS are planning to launch a single cryptocurrency that would be used to settle transactions using the only cryptocurrency. The BRICS nations are planning this development as they have reduced the settlements share in dollars. Dmitriev informed that the dollar in foreign trade has fallen from 92% to 50% in the past five years.
A member of State Duma’s expert council, Nikita Kulikov, mentioned that the development process of a cryptocurrency is easier as compared to its implementation and usage between countries.
More alternatives on their way
Three nations from BRICS- India, Russia, and China are even planning to look for a substitute for the U.S. dominated SWIFT payment system to ease up the trade with other countries. There are rumors about Russia’s financial messaging system SPFS will be linked with China’s cross-border interbank payment system CIPS. On the other hand, India is planning to tie the Central Bank of Russia with another service that is currently in the development stage.