Brics Summit 2023: Is the Gold-Backed Digital Currency Coming?

Author: Connor Campbell - Bullion & Economics Editor

Published: 14 Jun 2023

Last Updated: 29 Aug 2023


Discover the groundbreaking developments set to unfold at the BRICS Summit 2023. With the potential introduction of a gold-backed digital currency, the BRICS countries aim to challenge the dominance of the US Dollar and enhance their financial sovereignty.

The Arrival of BRICS Gold-Backed Digital Currency

The upcoming BRICS Summit 2023 promises a significant event in the realm of international finance. Scheduled for the 15th BRICS summit from August 22nd to August 24th, 2023, this gathering has the potential to introduce a gold-backed digital currency that may have a substantial impact on the global payments landscape. By introducing an alternative to the dominant US Dollar, the BRICS nations seek to bolster their financial sovereignty and reduce reliance on existing monetary systems. This article delves into the significance of the upcoming BRICS Summit, explores the member countries' roles, examines the proposed currency, speculates on its release date, and provides an overview of the summit's agenda.

BRICS Nations Flags

July 2023 Update

On July 7, 2023, the Russian government reported through state-controlled RT News that the BRICS nations, comprising Brazil, Russia, India, China, and South Africa, have confirmed the introduction of a new tradable currency backed by gold. An official statement is anticipated to be made during the BRICS Summit 2023 in South Africa, scheduled for August. The declaration from Russia regarding the backing of the BRICS currency by gold holds considerable significance. This move has the potential to generate a notable increase in demand for the precious metal, consequently resulting in an escalation of its price.

In a significant step towards de-dollarisation of the global economy, as many as over 40 countries have expressed interest for the BRICS membership, challenging the dominance of the US dollar that has persisted since World War II. Today, almost all international transactions are transacted with U.S. dollars, as stated by Fortune, the American business magazine.

With 88% of international transactions conducted in U.S. dollars, and the dollar accounting for 58% of global foreign exchange reserves, the dollar’s global dominance is indisputable. (Source)

According to Professor Anil Sooklal, South Africa's BRICS Ambassador-at-Large: Asia and BRICS at the Department of International Relations and Cooperation, debunked this idea, stating, 'There has never been any discussion of a BRICS currency; it is not part of the agenda'. Professor Sooklal has subsequently asserted that BRICS has the potential to positively impact the world, as reflected in the following statement:

"Even in terms of reserve funds, the four major BRICS countries are among the top 10 countries in the world rankings. BRICS should be seen as a catalyst that can change the world for the better"
(Source) - Anil Sooklal

Anil Sooklal

August 2023 Update

In an interview conducted by Kitko, Michelle Makori interviewed Andy Schectman, the President and owner of Miles Franklin Precious Metals, regarding the topic of the BRICS expansion. Schectman sees Saudi Arabia's recent membership request to join BRICS as a key player in this transition. He predicts that with up to 85% of the global population potentially moving away from the U.S. dollar, this move could be significant.

Recent developments have substantiated that Russian President Vladimir Putin will not be attending the 15th BRICS Summit scheduled for this August. This decision comes in light of alleged war crimes that have reportedly taken place in Ukraine, amid the ongoing conflict between Russia and Ukraine. Consequently, an international arrest warrant has been issued for President Putin. Despite these allegations and the absence of the Russian President, the BRICS summit is set to proceed with the participation of leaders from other BRICS nations.

BRICS Summit 2023 Overview

The BRICS Summit commenced on August 22, 2023, in Johannesburg, South Africa. It was hosted by the South African President, Cyril Ramaphosa. This gathering united notable figures such as the Indian Prime Minister, Narendra Modi, the President of China, Xi Jinping, and the Brazilian President, Luiz Inácio Lula da Silva. Additionally, the event attracted prominent BRICS members and over a dozen other world leaders from diverse regions across the globe.

Their attendance was fueled by the aspiration to join the bloc and contribute to the efforts aimed at De-dollarisation. Despite Vladimir Putin's inability to travel to South Africa to participate in the BRICS Summit, Russia's Foreign Minister, Sergei Lavrov, attended the event on his behalf. This was done to uphold Russia's position and involvement in BRICS affairs.

During the BRICS Summit, it was announced that six countries are slated to gain membership in 2024: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE (United Arab Emirates). This significant development further reinforces the motivation behind BRICS' expansion, as this move will double the size of the bloc. It is widely recognised that BRICS currently represents approximately 40% of the world's population and around 25% of the global GDP. With upcoming appointments, we can anticipate a further increase, as Saudi Arabia, UAE, and Iran are three of the largest oil producers.

An interesting development during the BRICS summit was that China's President, Xi Jinping, missed his speech. Instead, he delegated his Commerce Minister, Wang Wentao, to deliver a hostile stance towards the United States.

"Should we embrace prosperity, openness and inclusiveness, or allow hegemonic and bullying acts to throw us into depression?" he said." - Commerce Minster Wang Wentao

What is BRICS?

BRICS refers to a group of emerging economies that have experienced considerable growth and aim to challenge Western dominance in global affairs. Comprising Brazil, Russia, India, China, and South Africa, these nations collectively represent a formidable force in the global economy. Furthermore, the group is actively considering expanding its membership, with several countries expressing interest in joining.

Who Are the BRICS Countries/Members?

The founding members of BRICS are Brazil, Russia, India, China, and South Africa. However, more than 40 nations have currently expressed their interest in joining, and among them, 23 countries have applied for BRICS membership.

This table below provides information on the countries that have submitted applications for BRICS membership, including the year of application and the current status of their membership.

Which Countries Have Applied for Membership?

Country Year of Membership Request
Algeria 2022
Argentina 2022
Bahrain 2023
Belarus 2023
Bolivia 2023
Cuba 2023
Egypt 2023
Ethipia 2023
Honduras 2023
Indonesia Pending
Iran 2022
Kazakhstan 2023
Kuwait 2023
Morocco 2023
Nigeria 2023
Palestine 2023
Saudi Arabia Pending
Senegal 2023
Thailand Pending
United Arab Emirates Pending
Venezuela 2023
Vietnam 2023

BRICS New Currency

At the heart of the BRICS Summit 2023 lies the proposal for a gold-backed digital currency, a potential game-changer in international finance. This currency seeks to offer an alternative means of conducting global trade and accumulating reserves, providing benefits such as enhanced financial autonomy and reduced reliance on the US Dollar.

The significance of creating a fresh payment medium has been emphasised by Alexander Babakov, Deputy Chairman of the State Duma. According to him, digital payments could be the most practical and promising option, and such a currency could be advantageous to China and other BRICS nations, rather than the West. In addition, Babakov suggested that this novel currency would be supported by gold and other commodities, including rare-earth elements.

When Will the BRICS Currency Be Released?

Although the official announcement of the BRICS currency could be scheduled for the 15th BRICS Summit in 2023 (22 August - 24 August 2023), the timeline for implementation and widespread adoption remains uncertain. The 15th BRICS Summit serves as a platform for member countries to engage in discussions on crucial topics related to international finance and cooperation. In addition, the summit will highlight initiatives such as the BRICS Cable project, which aims to enhance communication infrastructure among member nations, underscoring the group's commitment to connectivity.

Percentage of Global Currency Reserves Held in USD

The global currency held in US dollar reserves has shown a fluctuating trend over the years:

  • In 1960, it stood at 61.70%.
  • By 1980, it had decreased to 57.90%.
  • In 2000, it experienced a rise to 71.20%.
  • As of 2023, it has dropped again to 58%.

With the BRICS alliance potentially making a significant announcement this August in 2023, the global reserve currency landscape might see further changes.

Global Currency US Dollar Reserves Since 1960 - 2023

Motivations for Ditching the US Dollar

The motivation to reduce dependence on the US Dollar stems from concerns surrounding its perceived weaponisation through the imposition of sanctions. The BRICS countries, along with potential future members, are striving to mitigate the adverse effects of such sanctions by promoting alternative payment mechanisms and currencies. This proposed gold-backed digital currency draws inspiration from historical proposals and seeks to anchor the currency with a tangible and universally recognised store of value. Gold's inclusion lends credibility and stability to the new currency, especially given the prominence of gold reserves in countries like Russia and China.

Reshaping the International Monetary Landscape

The introduction of a gold-backed digital currency by the BRICS nations has the potential to reshape global payments and challenge the hegemony of the US Dollar. As the summit approaches, it is crucial for governments, financial institutions, and investors worldwide to closely monitor these developments and prepare for potential implications.

The rise of the BRICS countries as a formidable economic force demands attention and strategic planning. By reducing dependence on the US Dollar and embracing alternative payment mechanisms, the BRICS nations strive to enhance their financial sovereignty and insulate themselves from the impact of sanctions. The BRICS Summit 2023 could represent a crucial juncture, marking the beginning of a new era in global finance.

Gold as Hedge Against Inflation

Discover groundbreaking developments at the BRICS Summit 2023, including a potential gold-backed digital currency challenge to the US Dollar's dominance.

Stay informed by signing up for our mailing list and follow us on Instagram, YouTube, Facebook, TikTok and Twitter for coin news.

Sign up to our newsletter:

Related Articles

This guide and its content is copyright of Chard (1964) Ltd - © Chard (1964) Ltd 2024. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited.

We are not financial advisers and we would always recommend that you consult with one prior to making any investment decision.

You can read more about copyright or our advice disclaimer on these links.