BRICS Gold-Backed Common Currency to Be Introduced in August | Hacker News Reader

BRICS Gold-Backed Common Currency to Be Introduced in August

nobsbitcoin.com

4 pointsjanandonly4 comments

This story cites as its source a Benzinga article which cites as its source a "Russia Today" article.

Basically, Russia and China (with Brazil, South Africa, and India) are said to be "set to introduce a new currency backed by gold, Russian English news channel RT reported." But that's not entirely true, according to India's third-largest newspaper:

"India seems to be the only country that has not shown interest in the plans to launch a new currency. India’s External Affairs Minister, S. Jaishankar in a press conference held on Monday, 3rd July, 2023 said that India has no plans for a BRICS currency. He declared a month before the summit that India might back out from creating the new currency."

https://timesofindia.indiatimes.com/blogs/truth-lies-and-pol...

Well, a story that chains back to RT claims that, whereas BRICS own bank’s CFO says the bloc has no imminent plan to deploy a currency.

Not sure if its amateur-hour propaganda or amateur-hour serious multinational currency roll-out but... definitely amateur-hour, one way or another.

https://www.bloomberg.com/news/articles/2023-07-05/brics-has...

I’m not sure what this would offer anyone that can’t already be achieved by trading gold backed financial instruments, or why a country like China would offer a competitor to the Yuan.

If they want to trade without using USD they don’t need this to do that. They just have to start trading in their own currencies with each other.

The point of the USD as a trading currency lies in its virtually indestructible value combined with malleability. If two countries trade in USD, no party will have a surprise later on.

If two countries trade, for example, in Yuan, and China decides not to buy foreign Yuan in exchange for the other local currency anymore, the value is lost (or at least harder to realize and probably incurring heavy losses).

I'm no economist, but that's my understanding. From this PoV it makes sense to make deals in a gold-backed currency as a replacement for USD. Not sure how they want to get enough gold from to really back it up. Could be possible, didn't research that, but seems of by one or two orders of magnitude.

Reply on news.ycombinator.com