Brazil nixes BRICS currency, eyes less reliance on 'mighty' dollar
Brazil nixes BRICS currency, eyes less reliance on 'mighty' dollar
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24 comments
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Tbh, I'm not a big fan of attempts to create a BRICS currency either. The economic conditions across the BRICS countries are too different for a common currency to be adopted for domestic transactions. And if this common currency was only limited to international transactions, you would still recreate the problems of the gold standard (a hard limit on the availability of money for transactions).
I think the correct approach is to facilitate both easier transactions in local currencies and cross-border bartering of commodities. The former allows countries to take on a level of "debt" through net imports according to their needs, the latter allows material production to dominate financial constraints.
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The economic conditions across the BRICS countries are too different for a common currency to be adopted for domestic transactions.
They are explicitly not trying to create a domestic currency. They are trying to create a Bancor-like financial instrument that is exclusively for international payments.
How could a BRICS+ bank and settlement currency work? Economist Michael Hudson explains
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"Brics currency" would go around the problems of gold, becausse they have been planning for it to be tied to a "basket of goods" like oil, wheat, gold, etc. It has always been about solving the balance of payments issue among the member states, without using the dollar or gold. You are right that an Euro-like currency would be bad for Brics countries economies because of their development levels' but so is Euro stifling for most the EU countries, but I digress.
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yet we hold the dollar as a common currency...
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24 comments