Brazil, Russia, India, China, and South Africa which form (BRICS) are five of the major emerging nations in the world today. They are a major economic bloc and the treaties and trade deals between them bring a lot to the table.
Now, they are in talks to create their own cryptocurrency. Similar to the way the euro made the EU’s trade much smoother, a single electronic currency for payment transactions would be a big help to these BRICS countries.
BRICS are not only holding discussions about developing their own cryptocurrency but also to build the infrastructure that supports it, too. This plan was unveiled by Kirill Dmitriev, the CEO of the Russian Direct Investment Fund (RDIF).
The RDIF is a major sovereign wealth fund backed by the Russian government. Valued at $10 billion, it wields major purchasing power on the market and it would benefit greatly from a payment system that crossed through five nations.
The plan is to build up a single payment system that uses the new cryptocurrency. The BRICS Business Council fully supports the ides since a functional and efficient payment system would encourage investors and even regular people from the five member nations to use it. With more stable transactions, investments will be the big winner.
The new cryptocurrency also continues the move away from the dollar. Having long been the most popular medium of transactions, dollar use in investments has fallen from 92 percent to 50 percent in the last five years.
Cryptocurrency technology is a boon to those countries that want to create alternatives to the current payment systems out there. With modern technology, it is simple enough to create a cryptocurrency from scratch. The concern for BRICS is how to implement it across member countries.
Three countries that are part of the BRICS group are already trying to come up with a way to circumvent the SWIFT network, which is the current backbone of international transactions. This includes Russia, India, and China. They want to do this to evade the US sanctions that have been placed on them. This new plan for a cryptocurrency system would sit right with their goals.
The countries already have their own independent cross-border transfer system. Russia’s SPFS will soon link with China’s cross-border interbank payment system CIPS. India will join the party by a link to the Central Bank of Russia’s platform for cross-border transfers. The resulting network can provide a good prototype for the upcoming system.