A photo of Russian President Vladimir Putin holding what appeared to be a colorful BRICS bank note during the recent summit in Kazan drew global attention, sparking widespread speculation about a possible new BRICS currency. However, it was later clarified that the banknote was not an official note, but simply a model presented to the Russian leader by enthusiasts.
The emotion and the clarification
The image of Putin holding the banknote, which featured the flags of Brazil, Russia, India, China and South Africa, led many to believe that the BRICS had officially launched a joint currency. However, the authorities quickly denied this idea. “The coin President Putin is holding is a model of a BRICS banknote presented at the Kazan summit by enthusiasts and is not an official currency adopted by the BRICS,” officials confirmed to Financial Express Online.
This incident highlights global anticipation for a possible BRICS currency, but also underscores the reality that such a development is not yet on the horizon.
Why is there no new currency?
The idea of creating a unified BRICS currency has been discussed within the bloc for some time, driven by the desire to reduce dependence on the US dollar. However, there are significant challenges that make this step difficult in the short term.
First, the founding countries of BRICS—Brazil, Russia, India, China, and South Africa—are diverse in their economic structures and monetary policies. Establishing a single currency across such varied economies would require extensive coordination and commitment. Each country has its own national interests, fiscal policies and inflation control mechanisms, which complicates the idea of a shared currency. Second, the geopolitical landscape has become increasingly complex. Rising global tensions and uncertainties have made BRICS nations more cautious in considering a common currency that could disrupt existing financial systems. Although the bloc’s leaders agree on the need to reduce dependence on Western currencies, they recognize that a common currency may not be the most immediate or practical solution.
President Putin, for example, has suggested that the bloc focus on strengthening the use of national currencies in cross-border trade rather than rushing toward a new currency. “Developing new financial instruments that work within the current framework will be more practical for now,” he noted during the summit.
The way forward: digital alternatives?
Although the BRICS’ formal currency could be delayed, discussions on creating digital financial systems have gained momentum. A potential BRICS digital currency could allow the bloc to bypass Western financial networks, offering a new way to conduct trade without relying on the US dollar.
Some proposals suggest backing such a currency with gold, which could provide stability and reduce the risks associated with fiat currency inflation. However, a formal timeline for the creation of this digital currency has not yet been established, and discussions remain largely speculative.
The sample note that generated excitement at the BRICS summit reflects growing interest in alternatives to the US dollar, but also highlights the significant obstacles that exist before a unified BRICS currency can be launched. For now, leaders appear to be taking a cautious approach, focusing on strengthening existing financial systems while exploring digital alternatives for the future.
Note: this is an article republished from the media “Financial Express” through a cooperation agreement between both parties for the dissemination of journalistic content. Original link.
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