The Head of the Russian Direct Investment Fund (RDIF) Kirill Dmitriev has stated that the BRICS may opt to create their own cryptocurrency for the purposes of global commerce.
A cryptocurrency is a digitally based means of exchange wherein the value of said currency is not determined by a central-bank. Most cryptocurrencies can be converted into state-issued currencies (Dollars, Euros, Yuan, etc.) through various foreign exchange services.
Currently, one of the biggest issues facing cryptocurrency development is the fact that they are not backed up by any central bank. However, many also see this apparent disadvantage as a possible opportunity, particularly where unilateral Dollar based sanctions are concerned.
While the US Dollar remains the most popular global trading and reserve currency, this is rapidly changing. A BRICS backed cryptocurrency may be both the proverbial ‘Dollar buster’ as well as a ‘sanctions buster’.
In May of this year, China and Russia agreed to begin a process of trade in local currencies. Turkey and Iran have also begun steps to break away from the Dollar.
Even more recently, China announced that is plans to allow for oil trading in Yuan which will be convertible to gold at the Shanghai and Hong Kong international gold exchanges.
The creation of a BRICS cryptocurrency could potentially retain the flexibility of current cryptocurrencies with the additional benefit of being backed by the leaders of a large economic-trading union which would give traders confidence in such a currency that many existing cryptos such as Bitcoin are lacking.
It is not certain what the exchange rate of a would-be BRICSCoin would be, but there is every chance that it could be based on a derivative of what is known as Special drawing rights (XDR) a current means of exchange which pools the values of the US Dollar, British Pound, Japanese Yen and the Euro.