At the BRICS (Brazil, Russia, India, China, South Africa) summit last year, the much-anticipated announcement of a common digital currency gave way to talk about using local currencies for cross border payments. Now BRICS has expanded from five to ten members and Russia is currently the organization Chair. Last week Russia’s Deputy Foreign Minister Sergei Ryabkov discussed the topic saying that a common currency is not a current priority. On the other hand, he said it would be possible to move very quickly, implying a solution could be less than a year away.
After this year’s February BRICS meetings, Russia spoke about a BRICS Bridge platform for payments without mentioning digital currency. Two BRICS members, China and the UAE, are involved in mBridge the similarly named cross border central bank digital currency (CBDC) initiative. Using individual digital currencies for cross-border payments is a significantly different approach than using a common currency.
The Governor of the Bank of Russia, Elvira Nabiullina, has previously spoken about the complexity of creating a single BRICS currency. She made the comments before the BRICS membership expanded.
Ryabkov BRICS common currency comments
“I would not say that this idea has been shelved,” said Mr Ryabkov last week. “Although its implementation, as we all understand, involves, among other things, such aspects as the creation of a single issuance center, the creation of a Central Bank that sets a common basic discount rate, as possibilities for borrowing from the Central Bank by the banks of the participating countries.” That’s according to an automatically translated press conference, as reported by Ria Novosti.
“(We) agree that today BRICS, which has 15 years behind it and has just doubled in size, is hardly ready for such steps and experiments. But this does not mean that this idea has been postponed.”
He added that a “quite bold, quite innovative scheme in this area will be worked out, and in a future that is not calculated in years and decades, but much faster.”
As context, during January discussions about current Russian CBDC pilots, central bank Governor Nabiullina said the CBDC platform was designed to support integration with similar foreign solutions. “We are currently conducting consultations and negotiations with many friendly countries and, of course, with the BRICS countries, on cross-border payments through digital currencies.”
