BRICS+ countries are being urged to accelerate the development of a joint cross-border payments mechanism to reduce their dependence on the US dollar. A report by the think tank BRICS+ Thinking highlights the feasibility of such a system, though it acknowledges significant challenges in creating a shared currency among the member nations.
The report, authored by Gregory T. Chin, Danny Quah, and Jim O'Neill, emphasizes the need for central banks within the BRICS+ group to prioritize this goal and ensure all technical requirements are met. The authors stress that this mechanism is crucial for facilitating smoother financial transactions among the emerging economies.
While the idea of a common currency has been discussed, the report notes that introducing one would require substantial reforms, including greater central bank independence, a common monetary authority, and fewer restrictions on capital flows. The authors describe the initial outlook for a BRICS+ currency as 'not hopeful,' citing difficulties in achieving free convertibility under current policies.
The prospect of a BRICS+ currency has drawn criticism from US President Donald Trump, who has threatened 100% tariffs on member states if they proceed with such a plan. Despite this, efforts to reduce reliance on the dollar have gained momentum globally, particularly since Western sanctions were imposed on Russia following its 2022 invasion of Ukraine.