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BRICS Digital Currency: Welcome to the End of Traditional Money

Updated: Apr 27, 2023

The BRICS nations (Brazil, Russia, India, China, and South Africa) are driving the effort to redraw the global economic and financial landscape.

A trade pact between Brazil and China, allowing for the use of the yuan and reais, respectively, was recently revealed. This action will inspire similar action in other South American nations to reduce their reliance on the US dollar, seeing that BRICS has the ability to upset the G7 nations' hegemony and alter the balance of power in international affairs.

The BRICS countries can develop a digital currency that is more widely available and less vulnerable to fraud and manipulation by employing blockchain technology. Decentralization's benefits, such as lower transaction costs, higher security, and greater transparency, may apply to this new currency. The inefficiency of cross-border payments is one of the major issues facing the current global financial system. Conventional international money transfer procedures are frequently cumbersome, expensive, and slow.

Blockchain-based global currency led by the BRICS might provide a quicker, less complicated, and more affordable alternative for cross-border transactions. By enabling easy cross-border payments, the new currency might promote trade and economic integration inside the BRICS countries and beyond.

Additionally, the currency's digital character may help to advance financial inclusion by allowing people and companies with restricted access to traditional banking services to engage in the global economy. The usage of smart contracts is another technical advancement that might play a key role in the creation of the new global currency for the BRICS nations.

Payments, settlements, and asset transfers can all be automated with these self-executing contracts because the terms are put directly into the code. The BRICS currency system could support programmable money, where certain requirements must be satisfied before a transaction is carried out. While there are tremendous potential advantages to utilising cutting-edge technology for the BRICS new global currency, difficulties and worries must be addressed.

Because cyberattacks and technological hiccups could damage digital currency's reputation and value, it is crucial to ensure its security and stability. The BRICS countries have to manage the complicated regulatory environment surrounding cryptocurrencies and blockchain technologies. They must create a cogent regulatory framework that supports innovation while safeguarding consumer interests and preserving economic stability.

The success of the BRICS' new global currency depends on its technological component, which has the potential to completely transform the world's financial system by utilising blockchain technology, digital currencies, and smart contracts. The potential advantages are enormous, ranging from more effective international trade to greater financial inclusion.


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