And now, BRICS eyes creation of a central bank for currency issue

China, with backing from Russia and South Africa, is planning an onslaught on the mighty dollar by introducing a new currency, to be issued by a proposed BRICS central bank that would combine the strengths of the respective currencies of the five countries in the economic forum.

The development follows an earlier proposal by Russia and China for setting up of an independent BRICS payment system using digital and blockchain technologies, as part of a move to end the dominance of US dollar in global payment system.

Besides Russia, China and South Africa, the BRICS bloc of countries include Brazil and India.

Reports citing sources at the BRICS-sponsored New Development Bank (NDB) said the forum is now looking at the prospects of creating a central bank for BRICS that would eventually be issuing a common currency for member countries of the forum.

Chinese state-backed newspaper Global Times in a report on Saturday quoted South African Ambassador to China Siyabonga Cyprian Cwele as saying that member countries of BRICS will be meeting this month to discuss the proposal in detail.

The report also said the agenda of the meeting is a discussion on the effectiveness and reliability of a digital currency in facilitating global trade and settlement and minimising the risk of sanctions.

While Russia’s deputy foreign minister Sergei Ryabkov recently noted that the creation of a central bank is key to issuing a common BRCIS currency, Russia has not officially made its stance clear.

Ryabkov was replying to a question posed by news agency RIA Novosti about the status of the proposal for a BRICS common currency. 

The BRICS forum has been discussing the common currency proposal as part of its de-dollarisation efforts for quite some time, there is a lack of consensus among member nations over such a common currency. 

Neither India, nor Brazil has so far made any comments on the BRICS plan for a digital currency or the proposal for a central bank