Russia Calls for Global Reserve Currency at BRICS Summit

The war between Russia and Ukraine that began on February 24, 2022, has reshaped global energy costs, has triggered an increase in the inflation rate on a global level, and has created a massive global food shortage.

On Monday, June 27th, Russia’s Ministry of Economic Development proposed that “a new international reserve currency based on the BRICS currency basket requires more transactions to be made in national currencies.”

According to the Russian news agency RBC, the Russian official also stated that the current “reliance on the US dollar and euro…has to be reduced.”

The BRICS alliance consists of Brazil, Russia, India, China, and South Africa. Its main intention is to promote peace, development, cooperation, and security in these five emerging market economies.

The BRICS claimed that by the year 2050 they would dominate the entire global economy.

This new payment system proposed to members of BRICS by Russia will have an online wallet to carry out transactions within the five member countries.

This project is mainly handled by China and India as they currently have the required technology to set up the system and launch it.

This new payment system will enable citizens of the five-member countries to pay using their smartphones regardless of what currency the customer’s account is in.

To create a functional new reserve currency, it is essential to have a united financial structure which is already occurring in the BRICS countries.

Still, on Russia’s Call for Global Reserve Currency…

There is currently an increase in the settlements of the national currencies and the intended rate of de-dollarization has been met.

Indian Ambassador Venkatesh Varma commented, ”[The] dollar has been dominant for a very long time. But particularly since February of this year, there is a greater realization that over-dependence on a single currency—[the] dollar as the global reserve currency—is a factor of increasing risk. But this risk cannot be addressed overnight.”

Russian President Vladimir Putin virtually met with the bloc leaders at a BRICS summit hosted by China in June and informed them that Russia is currently planning on constructing a new global reserve currency that favors the countries in the BRICS association.

The BRICS released a statement that they are going to set up a collective payment network to decrease the dependence on Western financial systems.

The BRICS alliance has received two new applications to join the BRICS since their summit hosted by China earlier this month.

Iranian officials released a statement that they have submitted their application to become a member of BRICS. Iran is currently the world’s second-largest gas reserve and said that they “add value for both sides.”

Argentinian president Alberto Fernández has released a statement on Telegram that they have also applied to join the BRICS.