BRICS members China and Russia have been actively promoting the usage of the Chinese Yuan for cross-border transactions in an effort to convince other developing countries to move away from the U.S. dollar for global trade. India, Pakistan, France, and several other countries have already started using the Chinese Yuan for settlements.
Initially, the BRICS alliance had plans to create a new currency to challenge the global reserve status of the U.S. dollar. However, ahead of the summit, the bloc made a U-turn and announced that the formation of a new currency will not be discussed in August.
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India, a member of BRICS, was the first to indicate that it would not participate in the currency formation. India’s Foreign Minister S. Jaishankar stated that the focus of the Modi government is on strengthening the Indian Rupee, and not on the creation of a BRICS currency. He emphasized that the Indian currency will remain a national issue and not be replaced by other currencies.
Similarly, Russia’s Central Bank Governor Elvira Nabiullina also expressed skepticism about the feasibility of a BRICS currency at the moment. She acknowledged that creating a new currency for global trade would require the consent of many parties and would be a complex project to implement.
As a result, both India and Russia have taken a step back from the formation of the BRICS currency. The U.S. dollar continues to maintain its dominant position as the de facto global reserve currency, with no significant challenge from other contenders at present