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Brazil’s president drums support for new trade currency creation

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TL;DR

  • Brazil’s president wants the creation of a new currency for trade among BRICs countries
  • Brazil and China are tipped to be part of the countries in charge of the development of the currency

Brazilian President Luiz Inacio Lula da Silva has drummed his support for creating a currency for trading between BRICS countries. The BRICS group comprises Brazil, Russia, India, and some others. Lula made his latest remarks during a speech in Spain, without providing further details.

The Brazilian President wants to eliminate the reliance on the US dollar

The president has been advocating the use of local currencies for developing countries rather than relying on the US dollar. During his visit to the New Development Bank in Shanghai earlier this month, he questioned why the BRICS group could not have a currency to finance trade relations between its members.

Lula’s recent comments regarding the need for a BRICS currency come as the group seeks to gain global influence and counter what it sees as Western countries’ “destructive actions”. The Brazilian president has said that a trading currency between BRICS countries should be created, similar to the way the euro was created for the European Union.

The move toward de-dollarization is not unique to BRICS countries, as other nations such as Indonesia have also shifted away from using the US dollar in trade settlements in favor of local currencies.

South Africa’s ambassador to the BRICS group, Anil Sooklal, said this week that 13 countries have formally requested to join the BRIC bloc, and six others have informally asked. Sooklal emphasized that the group is receiving applications to join every day.

The creation of a common BRICS currency is expected to be discussed at the leaders’ summit scheduled for the end of August. Russian Foreign Minister Sergey Lavrov said that this issue will be on the agenda during the summit.

The president’s adviser tips China and Brazil to head the development

Celso Amorim, Lula’s chief adviser on foreign policy, has said that China and Brazil could play important roles in building a less centralized world with no hegemony.

The push towards a BRICS currency comes as nations seek to reduce their reliance on the US dollar, which has been the dominant currency for international trade and finance since World War II. 

However, some experts have expressed doubts about the feasibility of creating a common currency for the BRICS group, given the different economic and political systems among its member countries.

Nevertheless, the BRICS group has continued to work towards strengthening its economic ties, including through initiatives such as the New Development Bank and the Contingent Reserve Arrangement. 

The creation of a BRICS currency would be a significant step towards greater economic integration within the group, and could potentially challenge the dominance of the US dollar in international trade and finance.

The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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