BRICS Bloc to Utilize Digital Assets

The BRICS economic alliance has enjoyed impressive growth throughout the last year. Indeed, that has granted the bloc impressive momentum heading into 2024. With its recently instituted expansion plan, and de-dollarization efforts taking hold on a global scale, its upward trajectory appears set.  According to a recent statement from the Chairman of the Russian State Duma Committee on the Financial Market Anatoly Aksakov, the BRICS bloc is working to replace the US dollar with cryptocurrency for trade.  Indeed, Aksakov discussed the alliance’s work to utilize digital assets in place of fiat currency for international transactions.  The economic alliance has long embraced its de-dollarization initiatives, along with the promotion of its local currencies. Subsequently, the development of digital currency solutions has been a priority since the arrival of its BRICS Pay system. Now, those efforts are set to carry the bloc toward a dollar-less future.  Throughout the last year, the BRICS bloc has embraced its opportunity to create a multipolar world. Its five-nation expansion effort enacted at its 2023 annual summit was one of the key pillars of that. However, so too is its commitment to the further embrace of local currencies in unilateral trade dealings. Now, the alliance is taking a clear step forward in that regard, as the BRICS bloc is seeking to replace the US Dollar with cryptocurrency for international trade. Indeed, Russia stated that the bloc represents a “serious channel to replace fiat currencies in international transactions.”  What makes the prospect of this all the more interesting for the collective is that they appear committed to developing their own Central Bank Digital Currencies (CBDC) for which to substitute with fiat.  Alternatively, the United States has been clear on its stance against such a project in the West.  Altogether, these projects should provide a clear opportunity for the BRICS bloc to continue to de-dollarize.  Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE) were invited to become members with effect from 1 January 2024.  A Saudi Arabian government minister said in mid-January, it had not joined. Argentina was also invited to join, but President Javier Milei pulled out in December 2023, shortly after taking office.Moreover, Russian Deputy Foreign Minister Sergey Ryabkov has recently discussed the development of new platforms for financial dealings. Specifically, these would support the presence of increased digital assets as opposed to fiat offerings.  Ryabkov discussed the “option of creating a platform that would unite the financial systems” of the BRICS members. What he called a “BRICS Bridge” would require stablecoins or other digitized currency forms.  This would integrate a clear way for the ten BRICS countries to de-dollarize.  However, it would also increase concern with the US dollar being absent from any international dealing with the alliance members, and nations seeking to embrace such unilateral trade.  South Africa says it could leave the alliance amid this policy shift.  BRICS could lose South Africa due to their upcoming election.