BRICS still intent on a common currency, but the process is complex: Russia

BRICS, the intergovernmental organization founded by Brazil, Russia, India, China and South Africa, has not shelved the idea of a common currency. However, it’s a complex process that will take some time, Russia says.

In a recent interview, Russian Deputy Foreign Minister Sergei Ryabkov noted that the organization currently has several more urgent issues to address.

Since its formation 15 years ago, one of BRICS’ main agendas has been to steer the five economies away from the United States dollar and all the associated financial systems like SWIFT. In recent months, the organization has considered a blockchain-based payment system and stablecoins.

“I would not say that this idea has been shelved,” Ryabkov stated in a press release, as reported by state-owned news agency RIA Novosti.

“…its implementation, as we all understand, involves, among other things, such aspects as the creation of a single issuance centre, the creation of a Central Bank that sets a common basic discount rate, as possibilities for borrowing from the Central Bank by the banks of the participating countries,” he added.

In January, BRICS welcomed four new members: Ethiopia, Egypt, the United Arab Emirates and Iran. This further complicated the creation of a common currency as there were more factors to consider.

Ryabkov acknowledged this, stating that “BRICS, which has 15 years behind it and has just doubled in size, is hardly ready for such steps and experiments. But this does not mean that this idea has been postponed.”

Ryabkov, however, clarified that the delay in issuing the new currency “is not calculated in years and decades, but much faster.”

Elvira Nabiullina, the Governor of the Bank of Russia, has previously expressed similar sentiments. In one interview in 2023, she claimed that the common currency “will be quite difficult to implement, like any idea of ​a supranational currency. It requires the consent of many parties.”

One of the ideas that the organization has explored is BRICS Bridge, a digital currency settlement platform. Russia has been leading this project and expects to test it on payments with the UAE and other oil-rich Gulf nations.

The United Arab Emirates (UAE) would be the ideal initial partner as the Middle Eastern nation has advanced central bank digital currency (CBDC) expertise. UAE is part of the mBridge wholesale CBDC project, alongside fellow BRICS member China and others like Thailand and Hong Kong.

Watch: The state of play and what’s to come with CBDCs