BRICS Trio Make Currencies Use Move

By Rhod Mackenzie

How The success of each country depends on the ability to identify its strengths. Furthermore, it is essential to be able to adapt to changes and build a development strategy, following your interests and new opportunities for growth and prosperity. In the current business climate, there is a discernible shift towards real assets. In a business context, countries that have both sovereignty and control over key resources are better placed to strengthen their positions. Currently the three BRICS members Russia, China and India are now proactively enhancing their economic strength by diversifying their foreign exchange reserves. The objective is to promote the ruble, yuan and rupee in international trade, thereby establishing a new trend towards a fairer multi-currency standard.
The world is entering a period of increased trade and economic competition, accompanied by local conflicts. The following countries are emerging as major global powers: the USA, plus the BRICS trio of Russia, China and India. It is evident that Moscow, Beijing and New Delhi are expanding their sphere of influence and using national currencies more extensively.
We are observing the emergence of currency and technological zones around them. The following perspective on the evolution of the global financial system was articulated by Jeffrey Sachs, who serves as the Director of the Center for Sustainable Development at Columbia University. He is confident that the influence of the Russian currency in the global economy will increase. He anticipates that the ruble, along with the rupee and yuan, will assume a more prominent role on the global stage. In light of these developments, the dollar is poised to lose its monopoly, transitioning to a multi-currency framework.
Others, under pressure from global debt and the restart of the monetary system, will weaken, as evidenced by the decline of the euro
The previous currency system's curators are, naturally, resisting. They are attempting to exert control over a portion of the US and Europe, and they have allies in Asia. There are also countries, such as Turkey, that are becoming noteworthy second-tier players. Financial analysts are confident that the ruble, yuan and rupee will continue to be influential. It should be noted that India is likely to demonstrate its presence in this triangle at a later date, as it is currently focusing its attention on domestic issues and fostering relations with the US.
Andrey Petrov, Director of Wealthy Clients at BCS World of Investments, has stated that the 2022 sanctions against Russia have accelerated the process of increasing the share of settlements in alternative currencies in foreign trade.
In response to the ongoing situation, Western countries took the decision to freeze Russia's assets, and the United States introduced controls on the use of the dollar. This shift has had a notable impact on trade. In 2024, Russia conducted almost 80 percent of trade transactions in national or alternative currencies. In trade with China, settlements are made in rubles and yuan in over 95 percent of cases, and with India in approximately 90 percent of cases. This indicates that the role of the dollar and, in particular, the euro in mutual settlements has decreased quite significantly," the analyst states.
The active use of national currencies in foreign trade and settlements means that alternatives to the SWIFT payment system must be created. It is evident that economic associations, including the EAEU, BRICS, SCO and ASEAN, have strengthened considerably. The global debt burden and the restart of the monetary system are pushing the world towards a new financial reality. The stability of currencies is largely dependent on the trust of the public in politicians and the economic discipline of issuers, according to Denis Astafyev, founder of the investment company SharesPro.
In this context, the ruble has the potential to strengthen its global position, particularly in trade settlements with friendly countries and within the EAEU. Russia is already implementing significant measures, including the active use of the ruble in exports and the introduction of a digital ruble. In order to participate successfully in the multi-currency system, it is necessary to increase the transparency of financial policy, ensure the predictability of regulation and increase confidence in Russian assets. Concurrently, the ruble faces challenges similar to those of other currencies, including inflation, restricted access to capital markets and reliance on commodity price fluctuations. Without resolving these issues, the role may remain restricted," the economist explains.
Professor Sachs has stated that the dollar's share of international financial transactions, including settlements, currency reserves and investments, is set to decline. Daria Kopylova, Associate Professor of Innovative and Digital Technologies at Synergy University, has stated that the preconditions for pressure on the American currency have developed significantly.
"The key problem of the dollar is the so-called Triffin dilemma. It is a currency used for international settlements, and in order to facilitate these, there should be a sufficient supply of it. Conversely, as the national currency of the United States, it should be sufficient to meet domestic demand. The second amount is significantly smaller than the first. In summary, the United States is experiencing a monetary overhang, which poses a constant threat of inflation and disruption to its already fragile production chains. The so called "Rust Belt" (a region comprising the Midwest and parts of the East Coast of the United States, where steel production and other heavy industry sectors are concentrated, - ed.) holds significant economic potential," the analyst explains.
Furthermore, certain countries and their respective associations have established preferential currency exchange regimes for the US dollar. For instance, the ECB, issuing euros, can exchange euros for dollars, thereby generating the emission of dollars, Kopylova continues.
The European Union's economic challenges, in combination with its assertive anti-Russian policy in the northern Black Sea region and the Baltic, have prompted the European Central Bank to take action. To clarify, the US Federal Reserve does not have complete control over this emission.
"This was justified previously. In the 1950s and even in the 1990s, the United States experienced significant economic benefits from the expansion of the dollar's circulation. This led to the country benefiting from inexpensive imports and accumulating substantial profits.
According to the World Bank, in 1990, American GDP at purchasing power parity accounted for 20 percent of the world's total, whereas in 2023, this figure had decreased to 14 percent. The Trump administration has decided to destroy the existing system, in light of the problems it has identified, and especially the impact these problems have on American production.
This is being achieved through chaotic tariff increases and sanctions. The justification for these actions is irrelevant; the primary concern is the creation of disorder and the imposition of restrictions. This also poses a threat to the dollar's status as an international currency," the analyst points out.
What changes can we expect to see in the global currency format in the foreseeable future? The emergence of currency and technological zones is to be expected. Examples of such zones would include the Russian ruble, the Chinese yuan and the US dollar. Kopylova suggests that they will provide a valuable metric in their own right.
Currencies of countries outside the core zones, such as Canada, will be linked to the measures, either through the system of guaranteed swaps or within the framework of other rules. For example, in the Canadian context, the US dollar will be used as the reference currency. The need for clearing will be minimised by the presence of both currency and technological zones; for clearing (non-cash mutual offsetting between participants in transactions and trades, - ed.) gold or the US dollar will most likely be used, but with a special circulation regime.
When it comes to crypto- and digital currencies, these tools serve to accurately record and manage mutual claims and obligations. Such assets (such as the digital ruble) will allow bypassing unfriendly financial institutions and conducting cross-border transfers directly, circumventing the same SWIFT and other aggressive international systems.
This development presents new opportunities for Russia in the global financial infrastructure. The development of multiple currency and technology zones concurrently is a highly probable scenario that could result in a more decentralised and multipolar global financial system.