BRICS Countries Considering Launching Their Own Stablecoin: What Does It Mean?
Date: 2023-12-08 Author: Dima Zakharov Categories: BUSINESS, IN WORLD
BRICS countries, comprising Brazil, Russia, India, China, and South Africa, are considering a groundbreaking financial innovation. Finance Minister of Russia, Anton Siluanov, recently proposed the creation of a stablecoin linked to a basket of BRICS nations' currencies as a potential solution to the problem of incomplete currency convertibility.
Siluanov revealed this idea during a lecture at the "Russia" exhibition, highlighting that Russia would hold the BRICS chairmanship in the coming year. One of the key topics for discussion and collaboration among BRICS nations is the establishment of a unified unit of account that can facilitate currency conversion and settlements. An innovative proposal on the table is to issue a digital financial asset, a stablecoin, backed by a basket of BRICS member currencies.
The Finance Minister emphasized that some BRICS nations, like India, face difficulties in converting their national currencies for international transactions, often having to rely on third-party currencies. The introduction of a stablecoin supported by a basket of BRICS currencies could potentially resolve this issue by providing a common unit for transactions among BRICS members.
In a related development, on December 7, 2023, Elvira Nabiullina, the head of the Central Bank of Russia, voiced her belief in the significant potential of digital finance in international transactions during a plenary session at the VTB "Russia Calling!" forum. This aligns with the broader discussion of utilizing cryptocurrencies for cross-border settlements.
In early November 2023, the Central Bank and the Ministry of Finance of Russia reached an agreement on various aspects of cryptocurrencies, including their potential use in experiments involving cross-border settlements. Nabiullina previously expressed the Central Bank's support for the experimental use of cryptocurrencies in international transactions, underscoring the growing importance of digital finance in the global economy.
