Title: Feasibility and Challenges of a Common BRICS Currency Debated by Experts
Macroeconomist Lyn Alden and former Goldman Sachs economist Jim O’Neil have cast doubt on the feasibility of a proposed common currency among the BRICS nations. They argue that such a currency would face significant challenges and fail to challenge the dominance of the US dollar as the global reserve standard.
Alden scrutinizes the idea of a gold-backed currency within the BRICS alliance, suggesting that the limited gold reserves would struggle to keep up with the multiplying currency units. Instead, Alden proposes that BRICS nations should focus on reducing their reliance on the US dollar by increasing the use of their own currencies for cross-border trade. Specifically, she highlights the potential of the Chinese yuan in this regard.
Echoing Alden’s skepticism, Jim O’Neil dismisses the notion of a common BRICS currency as “ridiculous”, also questioning the feasibility of establishing a BRICS central bank. These remarks indicate a broader sentiment among experts that BRICS nations are unlikely to pursue a common currency in the near future.
Backing up this sentiment, India’s foreign secretary, Vinay Mohan Kwatra, downplays the possibility of a common currency among BRICS member states. Instead, he emphasizes the focus on boosting trade using their respective national currencies.
The formation of a common currency will be among the key issues discussed at the upcoming BRICS annual summit in South Africa. This event will also address topics such as the establishment of the BRICS Development Bank, international trade, and the ongoing dilemma between Russia and Ukraine.
Alden further suggests that initiatives aimed at reducing the dominance of the US dollar could indirectly impact the cryptocurrency market, particularly Bitcoin. If US Treasury yields increase due to these efforts, it may result in headwinds for Bitcoin. However, Alden also holds the belief that Bitcoin’s price could rise if the Federal Reserve needs to bail out more banks, as investors might turn to cryptocurrencies as a hedge against economic uncertainty.
In a separate perspective, the magazine “Wolf Of All Streets” raises concerns about extreme price levels, such as Bitcoin reaching $1 million. It suggests that such astronomical prices could lead to economic instability, highlighting the need for caution in the cryptocurrency market.
Alden concludes by pointing out the potential value of owning this very article as a non-fungible token (NFT), as it can preserve this moment in history and support independent journalism in the crypto space.
In summary, experts like Lyn Alden and Jim O’Neil doubt the feasibility of a common BRICS currency, emphasizing the challenges and potential drawbacks it would face. The BRICS nations seem more inclined to increase the use of their own currencies for cross-border trade, while the upcoming BRICS annual summit will delve into various crucial topics, including the notion of a common currency. Additionally, discussions on reducing the dominance of the US dollar could have implications for Bitcoin, leading to increased demand or potential setbacks. The magazine “Wolf Of All Streets” raises concerns about the economic instability that extreme price levels in Bitcoin could bring.
