Author: Elham Makdoum – 27/02/2024
A BRICS(+) cryptocurrency around the corner?
By Elham Makdoum[1]
To accelerate dedollarization and undermine the SWIFT empire, the BRICS wants to create their own currency. And some elements suggest that currency might be a crypto.
The paths of Bitcoin and BRICS+, which today are separate and distinct, may one day meet at the crossroads of the Multipolar transition. This duo, in fact, has the potential to catalyze the end of the creaking Unipolar moment by rapidly speeding up an otherwise decades-long process, the dedollarization, and some steps in this direction are being taken.
At the Johannesburg summit, Brazilian President Luiz Inácio Lula da Silva told the audience that BRICS+ aspires to create a common currency to challenge the US dollar. How such a super-currency could be developed remains a topic of debate: some believe that a gold-anchored digital currency shall be forged, others point out that the BRICS shall bet on decentralized finance. The answer lies in the latter, because the defeat of the dollarocracy will come from surveillance-proof DeFi.
A cryptocurrency for the BRICS?
Something is certain in the uncertainty surrounding the BRICS+ realm: the nine countries are no strangers to the term cryptocurrency, which appears very often in their vocabularies and in their policy papers.
Iran’s and Russia’s central banks have recently a set up a collaboration with the aim of jointly issuing a gold-linked cryptocurrency. The Russian-Iranian project would like to create a sanction-proof stablecoin to be used in bilateral settlements. Such a stablecoin, if ever issued, could replace three different currencies at once: the Russian ruble, the Iranian rial, the American dollar. And it could allow Moscow and Tehran to also circumvent the SWIFT. If the experiment were successful, the impact on the macro-context, not only on the BRICS world, would be enormous.
Iran and Russia, just like many other countries, initially showed a wary attitude towards cryptocurrencies, opposing their use as a payment method, but the deterioration of relations with the West, emblematized by the rain of sanctions against them, led to a paradigm shift.
Events opened the eyes of Russia and Iran, making them understand that cryptocurrencies have a great, yet untapped potential in terms of sanction-proofing and currency multipolarity. As a result, Iran approved for the first time ever an anti-sanctions crypto-transaction in August 2022, whereas Russia is debating the legalization of cryptocurrencies in foreign trade.
Why a BRICS cryptocurrency would matter
Every BRICS member is more or less interested in DeFi and cryptocurrencies. The Russian-Iranian experiment may pave the way for a crypto-focused debate within the BRICS, a very heterogeneous group whose members are tied by a powerful and common goal: to make their economies less dependent on the American dollar and on the SWIFT-centered international financial system.
Cryptocurrencies have demonstrated on several occasions that they are completely independent from any geopolitical influence, more specifically Western influence, and this is due to the fact that they are in no way connected to the SWIFT, the pillar of global finance, which, since early 2000s, has repeatedly revealed itself to be the armed wing of the US – from the War on Terror to the Ukraine war, during which several Russian banks have been deconnected.
A gold-backed common currency would certainly be ambitious, but the relational asymmetry among the geographically dispersed and economically heterogeneous BRICS would make it weak, probably destined to fail.
The BRICS doesn’t need an ordinary common currency. It needs a crypto: financially decentralized, blockchain-based, sanction- and weaponisation-proof. The BRICS needs a common cryptocurrency, since cryptos hide the secret for the dedollarization: decentralization.
The Bitcoin, not only gold, could be the reserve asset for a BRICS-powered cryptocurrency: no need to be stored or processed, stability once it becomes the dollar of cryptocurrencies – it will eventually become so.
The world is slowly entering the era of the Bitcoin standard. The first power, or the first geopolitical and/or geoeconomic bloc, which will understand and capitalize on the potential of cryptocurrencies to the maximum, will have in its hands one of the keys that make up the bunch of keys to open the door to the post-unipolar and post-dollarocratic world.
[1] Elham Makdoum is a political analyst. She specializes in crypto-intelligence, metaverse, blockchain analytics and geopolitics of cryptocurrencies. Her publications have appeared on Dissipatio, Opinio Juris – Law and Politics Review, Vision and Global Trends, and Parabellum.
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