BRICS nations, which include the five significant upcoming economies of the world, Brazil, Russia, India, China, and South Africa, are looking into the idea of launching a unified payment system, in the form of a cryptocurrency.
On November 13th and 14th, the BRICS nations association held their 11th summit in Brazil in which the talking points such as technology, innovation, and digital economies, took center stage. The five nations engaged in hours-long discussions regarding how to curb two of the most pressing issues that continue to hamper the trade relations between them, that is, money laundering and drug trafficking.
BRICS nations to develop a cryptocurrency
Thus, in an attempt to further bridge the gap between developed and developing countries, the five countries have decided to create a cryptocurrency that would be used as a standard mode of payments between these countries. Kirill Dmitriev, the director-general of the Russian Direct Investment Fund (RDIF), revealed that the idea of a unified payment system is to bring about the much-needed ease in settlements among member nations.
The latest development has taken place given the reduced settlement shares in US dollars. Dmitriev confirmed that the use of US dollars in foreign trade has plummeted from ninety-two percent (92%) to fifty percent (50%) in the last five years.
Dmitriev further went to justify the initiative by explaining that the investments between BRICS nations constitute over twenty percent (20%) of the global inflow of foreign direct investment. Thus, it is absolutely essential to establish an efficiently and seamlessly operating payment system that boasts of facilitating settlements in fiat currencies with a robust framework.
Is India changing its stance on crypto?
And while the five nations are yet to kick off a formal development process of a unified cryptocurrency, it is important to highlight at this point that the significant move gets backing from a country that has been known to have a hostile stance on the use of crypto — in India, owning or transacting in cryptocurrencies is illegal.
Given the country’s green signal to the concept of a single payment system, which is likely to be based on cryptocurrencies, it remains to be seen whether India changes its pessimistic views on digital assets and assumes a somewhat receptive standpoint in the future.
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