Antonina Levashenko: “The EU experience has shown that the introduction of a single currency is a process which takes years”

Not long ago, Russian officials discussed the prospects of creating a new single currency for the BRICS countries, which, unlike the US dollar and euro, would be backed not by gold, but real resources, including land and rare earth metals. However, the member-countries were quite in favor of a different path of financial integration. Brazil's Finance Minister spoke in favor of using local currencies for intra-BRICS trade, while South Africa’s Minister of Finance expressed the opinion that a launch of such a currency suggested the establishment of a BRICS central bank, which means a loss of independence in monetary policy. The Indian authorities focused on strengthening their own national currency, saying that a stronger rupee would be a priority policy for the Indian government. So, now there is talk not about creating a single currency, but establishing a “single settlement system” for the BRICS countries. So far, Russian officials’ statements look quite inconsistent. Commenting on the plans of Russia as the country chairing the BRICS in 2024, Elvira Nabiullina, Head of the Central Bank of Russia said that on the one hand, the emphasis would be made “on settlements in national currencies.” On the other hand, Elvira Nabiullina noted that one of the goals for this year would be the development of the payment sector, namely, the interaction of payment systems. Proposals to create a single currency or unit of account were voiced earlier and at the same time questions were raised about implementation thereof, Antonina Levashenko reminds. “The EU experience has shown that the introduction of a single currency is a process that takes years, and it is not quite clear what unique advantages this project will yield the BRICS countries as compared to a switchover to payments in national currencies. Apparently, the financial institutions of the BRICS countries came to the same conclusion: in January 2024, the Central Bank of Russia announced that the share of Russia’s settlements with the BRICS countries in national currencies was equal 85% as of 2023. Payments in national currencies are a simpler and less expensive solution as compared to the creation of a single currency,” the expert said.