Russia, China, as well as the other members of the international group of emerging nations BRICS, which include India, Brazil, and South Africa, plan to create a cryptocurrency designed for payment settlements.
BRICS is an international group of emerging nations that includes some of the world’s most prominent economies. Namely, these are Brazil, Russia, India, China, and South Africa.
According to popular Russian media, during the business council of the alliance in Brazil, the countries discussed the creation of a cryptocurrency and a single payment system for operations between the members of the group.
The council reportedly supported the idea brought forward by Kiril Dmitriev, head of the Russian Direct Investment Fund. He proposed the creation of a single payment system for settlements between the members of BRICS. He also reiterated that the transactions can be carried out in cryptocurrency.
Adding more to the matter, Dmitriev said:
“An efficiently operating BRICS payment system is able to stimulate settlements in national currencies and ensure the stability of settlements and investments between our countries, which form more than 20% of the global influx of foreign direct investment.”
The cryptocurrency settlements within BRICS should be carried out through the union’s payment system. According to Nikita Kulikov, who is a member of the State Duma’s expert council, creating a cryptocurrency shouldn’t pose any serious challenge and that the technology isn’t complicated.
A few months ago all of the above might have sounded a bit too far-fetched, especially given the former position of China on the matter of cryptocurrencies. However, the country has pivoted in this regard with president Xi Jinping urging for further involvement with the technology.
Moreover, the country’s CCIEE Chair, Huang Qifan, reiterated that China will be the first to launch a central bank digital currency (CBDC).
Earlier in 2018, Russia’s Central Bank issued a report which outlined that cryptocurrencies do not pose a risk to financial stability. Even though the bank’s chairman has said that there’s no obvious need for a national cryptocurrency, the country has also enacted laws that define smart contracts and cryptocurrency, which could be considered as a step in the right direction.
In any case, should BRICS go ahead and move forward with the plans to create a cryptocurrency for payments, this would undoubtedly be a definitive endorsement for its merit.