BRICS currently does not have a single, unified currency. Each member nation utilizes its own national currency for domestic and international trade. However, the bloc has been actively discussing the creation of a new common currency.
The Proposed BRICS Currency: "The Unit"
While BRICS does not possess an existing common currency, there are significant ongoing discussions and initiatives to establish one. A prominent concept under consideration is a potentially gold-backed currency known as the "Unit."
Discussions around this proposed currency were a key focus, particularly at the 2024 BRICS Summit held from October 22 to 24 in Kazan, Russia. The primary motivation behind developing the "Unit" is to serve as an alternative to the US dollar in international transactions, aiming to reduce reliance on the Western-dominated financial system.
Why a New BRICS Currency?
The pursuit of a new common currency by BRICS nations stems from several strategic objectives:
- De-dollarization: A collective effort to reduce global dependence on the US dollar for trade and reserves.
- Enhanced Trade: Facilitating smoother and more stable trade among member countries by minimizing exchange rate fluctuations.
- Economic Sovereignty: Strengthening the economic autonomy of emerging economies and providing an alternative financial architecture.
- Global Influence: Projecting BRICS as a significant force in shaping a multipolar global financial system.
BRICS Member Nations and Their National Currencies
Each of the current BRICS member states conducts its economy using its distinct national currency:
| Country | National Currency | Currency Code |
|---|---|---|
| Original Members | ||
| Brazil | Brazilian Real | BRL |
| Russia | Russian Ruble | RUB |
| India | Indian Rupee | INR |
| China | Chinese Yuan (Renminbi) | CNY |
| South Africa | South African Rand | ZAR |
| New Members (as of 2024) | ||
| Egypt | Egyptian Pound | EGP |
| Ethiopia | Ethiopian Birr | ETB |
| Iran | Iranian Rial | IRR |
| Saudi Arabia | Saudi Riyal | SAR |
| United Arab Emirates | UAE Dirham | AED |
Future Outlook
The development of a common BRICS currency like the "Unit" is a complex undertaking, involving intricate economic, political, and logistical challenges. While it remains a concept under active discussion, it underscores the BRICS bloc's ambition to forge a new path in global finance and challenge existing paradigms. The successful implementation of such a currency could significantly reshape international trade and investment flows.
