365NEWS gathered that Nigeria, along with 12 other nations, joined the BRICS bloc—which comprises Brazil, Russia, India, China, and South Africa—as partner countries in October 2024.
According to Tribune Online, the announcement was made during the BRICS summit held in Kazan, Russia, from 22 to 24 October 2024.
Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, Uzbekistan, and Vietnam are the newly admitted partner countries.
BRICS, an intergovernmental organisation, was initially established as BRIC on 16 June 2009 in Yekaterinburg, Russia, by Brazil, Russia, India, and China.
The bloc seeks to strengthen cooperation in trade, development, and investment among emerging economies while promoting a multipolar world order to reduce reliance on Western economies.
One of BRICS’ key long-term goals is creating a shared trade currency to facilitate member transactions. This initiative aims to minimise exposure to currency fluctuations and foster financial independence from Western-dominated systems, such as the US dollar and the euro.
However, Tribune Online reports that the U.S. president-elect, Donald Trump, recently threatened to impose 100% tariffs against Russia and eight other top countries among a bloc of BRICS nations if they act to undermine the U.S. dollar.
A five-point explainer on the proposed BRICS currency in this article.
1. Purpose of the New Currency
The proposed BRICS currency is envisioned as a tool to strengthen trade and investment ties among member states. By reducing reliance on the US dollar, it seeks to protect member nations from economic disruptions caused by US sanctions and other external pressures.
2. Potential Structure
The currency’s structure could involve backing it with a basket of member nations’ currencies or even gold, enhancing its credibility and providing stability. The goal is to create a reserve currency that reflects the combined economic strength of BRICS countries and serves as an alternative to the dollar in global markets.
3. Impact on Global Trade
If implemented, the BRICS currency could transform global trade dynamics. It is expected to reduce transaction costs, boost trade among BRICS countries, and contribute to the emergence of a multipolar currency system.
4. Opposition from the United States
The proposed currency has encountered criticism from influential figures, including US President-elect Donald Trump. Trump has warned that any effort by BRICS nations to create an alternative to the dollar could trigger severe economic retaliation, such as imposing 100% tariffs on member states.
5. BRICS Payment Innovations
Alongside the proposed currency, the BRICS bloc is advancing digital payment systems, such as the BRICS Bridge. This platform facilitates cross-border transactions using member nations’ central bank digital currencies (CBDCs).
