Yves here. We have not written much about the BRICS alternative currency project because it seem too much in flux, save for the idea of improving information systems to increase the efficiency of bi-lateral trade. There is also a lot of poor quality commentary, such as articles by those who ought to know better who do not understand that SWIFT, and therefore the Russian messaging alternative to it, falls well short of representing a payments system. SWIFT does not perform either of the two core functions, clearing and settlement.
I have poked around a bit, and it appears it might not be easy to provide a non-MEGO (My Eyes Glaze Over) brief on clearing and settlement, and a more terse discussion might seem unsatisfactory in then explaining the implications for the BRICS project.
However, in the meantime, the article below illustrates how BRICS players have looked at some possible mechanisms and have had to reject them. As this piece warns, a gold-backed scheme would be a giant step backwards for BRICS (Michael Hudson is of the same view). However, it also indicates that Indonesia and perhaps other BRICS members or top entrant candidates would oppose it.
By Rendy Artha Luvian, who is pursuing his postgraduate studies at the Faculty of Social and Political Sciences at Gadjah Mada University. Originally published at Modern Diplomacy; cross posted from InfoBRICS
From October 22 to 24, 2024, a BRICS summit will be held, with a key agenda discussing the potential use of a gold-backed common currency. BRICS, a group of countries consisting of Brazil, Russia, India, China, and South Africa, has been an important player in the global economy since its formation. Their main goal is to strengthen economic and political cooperation among member countries and reduce dependence on a global financial system dominated by Western nations, especially the United States. The dominance of the US dollar as the global reserve currency and primary transaction tool has created significant reliance on a monetary system controlled by Washington.
BRICS’ de-dollarization initiative aims to reduce reliance on the dollar and create a more independent alternative for international transactions. Initial steps include establishing the New Development Bank (NDB) and Contingent Reserve Arrangement. However, these steps have not yet fully met the initial expectations. BRICS is now considering using a gold-backed currency as a more stable alternative, less affected by global political fluctuations. However, how will this impact countries like Indonesia? Will it provide an alternative to balancing the international monetary system or carry the potential for disaster?
The De-dollarization Initiative and Why BRICS is Considering a Gold-backed Currency
One of BRICS’ latest initiatives is developing a new payment system that does not require the US dollar. This system is designed to facilitate cross-border transactions using advanced digital technologies, including blockchain. Although the system is still under development, there is speculation about the possibility of using a gold-backed currency as part of this system.
A gold-backed currency could offer greater stability compared to fiat currencies, which are influenced by monetary policies and inflation. Gold has long been considered a reliable store of value and can act as a hedge against currency fluctuations. By linking the value of currency to gold, BRICS hopes to create an alternative more resilient to global economic instability and international sanctions that frequently affect member states.
However, despite being backed by gold, the monetary system proposed by BRICS would still fundamentally rely on usury, as interest rates would continue to play a central role. Over time, this reliance on interest-bearing mechanisms could lead to the gradual decoupling of the BRICS currency from gold. As financial institutions seek greater flexibility in responding to market demands and economic growth, the temptation to inflate the currency or adjust monetary policy could erode the initial gold standard. This scenario mirrors historical trends where currencies, despite starting as gold-backed, eventually severed their ties to precious metals in favor of more adaptable, fiat-based systems.
The History of Gold in the International Monetary System
Gold has long been used as a medium of exchange and a store of value. In the history of the international monetary system, gold played a significant role as the global currency standard, known as the Gold Standard. In 1944, the Bretton Woods Conference established a new international monetary system where the US dollar became the primary reserve currency and was exchangeable for gold at a fixed rate. This system gave the US significant power in international trade. Unfortunately, the exchange rate of the dollar to gold continued to rise, as more dollars were printed and circulated globally than the available gold reserves.
This indicated an abuse of power by printing excessive dollars, even without sufficient gold reserves to back them. Eventually, in 1971, President Richard Nixon announced the decoupling of the US dollar from gold (The Nixon Shock), starting the era in which the dollar became a fiat currency backed only by market trust, not by gold reserves.
With this transition, the US dollar became the primary currency for oil trading, leading to the term petrodollar, and the global financial system shifted to depend more heavily on the dollar. This change allowed the US to gain significant advantages, including the ability to run large trade deficits and impose economic sanctions on countries that opposed US foreign policy. International trade was conducted almost exclusively in dollars, even after it was no longer linked to gold. Oil maintained the dollar’s value afterward because, before the COVID-19 pandemic, almost 100 percent of oil trade was conducted in US dollars. However, by 2023, it was reported that one-fifth of oil trade was conducted in currencies other than the US dollar.
The instability caused by US monetary policies can broadly affect the global economy, pushing countries like BRICS to seek more stable alternatives.
Challenges and Risks of a Gold-backed Digital Currency in BRICS
A gold-backed currency offers various advantages, including value stability and protection against inflation. By linking currency value to gold, BRICS can reduce volatility and create a more stable alternative compared to fiat currencies. This could also help member countries reduce dependence on the US dollar and enhance their economic independence. Implementing a gold-backed currency in a digital system could combine the stability of gold with the efficiency of blockchain technology, which offers transparency and speed in international transactions. This system has the potential to increase international trade efficiency and reduce transaction costs associated with currency conversion.
However, implementing a gold-backed digital currency faces technical and regulatory challenges. Blockchain system security and data protection are primary concerns, as are potential issues related to the interoperability of existing international systems. Using a gold-backed digital currency as the basis for a BRICS currency could create vulnerabilities related to the stability and integrity of the monetary system. While blockchain offers transparency, there are risks associated with potential cyberattacks and system failures. Additionally, reliance on new technology could pose challenges in integrating with existing global financial systems.
The next question that arises is whether BRICS will repeat what the US did in the past—printing and multiplying currency recklessly, even without sufficient gold reserves to back it. This potential could lead countries working with BRICS into the same trap, once again, including Indonesia, which cannot avoid its connections with BRICS.
Indonesia’s Strategic Role
Indonesia has activated the LCT (Local Currency Transaction) National Task Force to strengthen the use of local currencies in international transactions. Involving Bank Indonesia and nine ministries/agencies, this effort aims to diversify currencies in bilateral transactions and increase exchange rate stability. This initiative, aligned with BRICS’ de-dollarization efforts, reflects Indonesia’s commitment to reducing reliance on the US dollar and supporting regional payment systems.
As one of the BRICS-affiliated countries, Indonesia plays a strategic role in this de-dollarization initiative. By introducing special tasks to support the use of the Rupiah in bilateral transactions and promoting local payment systems, Indonesia contributes to BRICS’ efforts to reduce dependence on the US dollar. These efforts include launching a cross-border payment system with Singapore and developing a universal QR code for regional payments in ASEAN.
De-dollarization could offer significant benefits to BRICS countries, including Indonesia, by reducing exposure to US dollar fluctuations and economic sanctions. Additionally, by increasing intra-ASEAN and regional trade, BRICS can strengthen its position in the global economy and reduce dependence on Western financial systems.
It is important to be cautious of what has happened in the past. History has shown that major changes in the monetary system can have broad impacts, both positive and negative. Trust in a particular currency or financial system can easily be exploited. The potential success of BRICS currency in breaking the dollar’s dominance in international trade is just as great as the potential for BRICS to lead the world into a state of economic instability. The Nixon Shock has proven how capitalist tools can deceive the world; will BRICS repeat the same step in the future, with currency that can be printed by simply typing numbers on a screen, if they no longer care about the foundational idea of using gold reserves?
Thank you, Yves.
Let me ask Kathleen Tyson, an expert on such matters, to contact you.
That would be terrific. Thanks so much!
Director’s cut: Kathleen Tyson
https://www.youtube.com/watch?v=_crvebzPOYk
Well, that was nice. She’s right up there with Desai and Hudson. Much appreciated.
As CS was so kind to mention Tyson, I thought the readership might see for themselves. Its one of the reasons NC is so important – always offering readership – people and views which are contra to the dominate orthodox narrative trotted out for around 50 years.
The following are very basic questions from an economic layperson.
Are these the alternatives to the dollar for international trade: (1) use local nation currencies, (2) use a common international currency for trade while using local nation currencies internally, (3) use a common currency both internally and for international trade, and (4) use one nation’s local currency as the international trade currency? (It seems to me like the euro is an example of the third option, and the US dollar of the fourth.)
Wouldn’t using gold to back the currency bake in the economic advantages of countries with current large holdings of gold? Wasn’t there also talk of a basket of national currencies to back the BRICS currency?
I think I saw that Saudi Arabia opted not to sign on for its petrodollar commitment at the last renewal date. What effect does that have on the strength of the dollar and the prospects for the BRICS alternative?
Many thanks! Of course a gold standard or gold exchange standard is often inherently deflationary, and it only proved truly appealing and/or effective in the aftermath of significant discoveries of fresh deposits, in California, Victoria, the Transvaal and the Yukon, hence the transient rise of bimetallism. With its $35/oz gold peg Bretton Woods was only really effective for a decade from convertibility in 1958, and was already under significant strain from 1959-60. As some have been suggesting for several generations, instead of a gold or silver standard or exchange standard or SDRs, what about a peg to a fairly wide basket of valuable commodities (including rare earths)? Query whether such a system might better provide a reasonable level of liquidity without compromising its underlying credibility, at least for a respectable period of time.
Wide basket of things still runs into the same problem mentioned in the article:
A more fundamental problem, not mentioned here, is trade deficits and surpluses. Such a deficit lead to the Opium Wars between UK and China. Right now, Russia has a lot of India rupees that it can’t quite do much with.
Yes, that is why I used the phrase ‘respectable period of time’. I assume that Sino-Russian trade would balance, but that India’s deficits with Russia would increase. Also, India will not be able to give Russia much that Russia is not already getting from China, unless India can defeat China on price – unless, as you note, India can start selling someone a good like opium which sells itself! That was the only way the HEIC was able to stop the drain of specie. Maybe the BRICS will have to devise some form of Keynesian clearing union and bancor…
I didn’t realize Indonesia’s role was that significant with BRICS – no wonder that the US attempts a coup in that country.
https://www.mintpressnews.com/leak-cia-ned-color-revolution-coup-indonesia/285617/
I didn’t realize Indonesia’s role was that significant with BRICS – no wonder that the US attempts a coup in that country.
[ Indonesia is not part of BRICS, nor the BRICS New Development Bank. Whether Indonesia will apply for a membership this October is unclear.
As for a possible coup, Indonesia is the 7th largest country in GDP, growing well, has just smoothly completed a national election and seems highly stable economically and governmentally. ]
https://fred.stlouisfed.org/graph/?g=1u3TA
August 4, 2014
Real per capita Gross Domestic Product for China, India, Indonesia and Philippines, 2000-2023
(Percent change)
https://fred.stlouisfed.org/graph/?g=1u3TY
August 4, 2014
Real per capita Gross Domestic Product for China, India, Indonesia and Philippines, 2000-2023
(Indexed to 2000)
The us has become dependent on an ever increasing trade deficit, currently about 1.2T/yr, to limit inflation and maintain living standards while operating 800 foreign bases. Imo China uses its huge trade surplus to support its belt/road expansion. The us imbalance seems least stable and certainly could not continue under a gold standard. China’s surplus won’t be stable if/when their foreign investments stop. Imo both will eventually move towards balanced trade, an adjustment that will be much more difficult for the us.
There are fresh signs that ‘exorbitant privilege’ is: (i) under threat; and (ii) may, in reality, be partly a function of fiscal arbitrage tactics adopted by US corporations in tax friendly jurisdictions, as Brad Setser and Mike Weilandt have been asking: https://twitter.com/Brad_Setser/status/1837243051929985535
Indeed, there has been discussions about backing the possible BRICS currency with gold or a basket of commodities. None of those have been very serious, as far as I know.
It’s almost as if the common currency project kinda exists within BRICS, but is not yet defined well enough to actually have something plausible to offer. Since there is a pronounced need for de-dollarizing the inter-BRICS trade as much as possible, the current emphasis is on using national currencies for bilateral trade.
The one more serious proposal regarding the currency has been from Paulo Nogueira Batista Jr., a Brisilian economist who has been in top jobs both at IMF and NDB. He proposed last year (?) a common currency based on basket of the member currencies, and that it would be only digital currency (as in no cash, only used between financial institutions). At first it would be used only by BRICS’ financial institutions, Contingent Reserve Arrangement and New Development Bank, which still use dollar.
It would be backed by bonds issued by the members, and it would be issued by a bank founded for the purpose. It would be released to circulation (at least at first) trough CRA and NDB. His hope is that both the currency basket and the backing by members would actually make the member’s national currencies less volatile and thus more acceptable as reserve currencies.
Or something like that, I’m sort of out my comfort zone here.
> From October 22 to 24, 2024, a BRICS summit will be held, with a key agenda discussing the potential use of a gold-backed common currency
#EyerollAndSigh
So they’re gonna get it wrong, huh?
But wait …
I prefer this construct, but why does it need any backing? The idea for a common currency should not fall prey to same Metallist fallacy as the Euro, but should adhere to the Chartalist philosophy of the money primarily being a unit of account. From such a perspective, the best path forward would be to agree upon (soft) per-capita-based issuance rules that are flexible enough to be easily extended when there are periods of shock. I explained this to a friend thus:
I know … time to start that PhD prospectus … LOL
As I’ve stated, this is not my area of any kind of expertise. That said, I couldn’t find the actual agenda of the main BRICS meeting in October. I did find a long list of preparatory meetings, though. At least one by central banks representatives followed by one of finance ministers.
I’m not saying, mind you, that an Indonesian post-grad writing to a Bulgarian economic website couldn’t know more about the agenda than what is publicly available, but I do have my doubts based on what I can read about Russia’s priorities during it’s BRICS presidency and what it wants to achieve in Kazan.
It’s my vague understanding that a certain level of financial de-dellarization has to be achieved before establishing a common currency (no matter what it’s based on), so that the national currencies of the members are more dependent on each other (or the national economy) than any of them is of the Fed interest rates.
Sorry if I gave the impression I was disagreeing with your post. I was going to just reply to the article, but then saw your comment and decided to reply to it because I really liked Batista’s idea. I should have said before commenting: thanks for sharing!
> It’s my vague understanding that a certain level of financial de-dollarization has to be achieved before establishing a common currency
Yeah, but what if you’re Venezuela?! :) #JusSayin
For some, their US reserves are gonna get pilfered/frozen anyway … clean cut is better.
First, a quote from Wikipedia:
The major BRICS countries like say China, Russia, etc., are surplus countries. In the event of a BRICS currency, who runs the corresponding trade deficits? That doesn’t preclude a BRICS currency but it means they have to run balanced trade.
As an aside, there’s some confusion between a “gold-backed currency” and a “gold-linked currency”. It’s a distinction with a difference. I believe “gold-linked currency” is the correct term to use in the case of a BRICS currency.
Michael Hudson disagrees with you on your closing claim. Any commodity connection is deflationary.
Both Mr Putin and Mr Xi are creatures of their education and upbringing like all of us, so don’t expect any revolution in affairs until they fade away. Baby steps is the order of the day, the Russians have been forced into what they could concoct under pressure and the Chinese now realise the threat and as a first move have pricked their housing bubble and are struggling to control the resulting chaos. They had to do this to start to prepare industrial production for war, there is only so much credit available.
The West won’t let up on either country so when new leaders appear in both countries I expect to see the ideas of Sergey Glazyev and others gain more currency.
Everything goes back to the availability of energy in the future. If the predictions of the peak oil guys were to come true, there’s no use for an alternative payment scheme since trade will collapse.
You don’t need a specific currency at all to have an inter-messaging system. You just need banks to be willing to hold reserves in a variety of different currencies. It would be relatively simple for BRICS to simply hold the main members’ currencies (and the USD in order to soak up all that trade) in reserve and then convert the others to one of those. Maybe even use the USD as an intermediary for unsanctioned states. South Africa could grab a few sheckles in arbitrage converting Euros to Rubles via the USD.
Yeah, you get an interest issue in the hours during the exchange (usually midnight UTC), but we have that issue now. It’s just different numbers moving at different rates – easy to figure out.
This talk of making a new currency backed by gold is completely unnecessary, though such a thing would help keep all the members honest with their monetary policy. As the article alludes – no country wants that. That’s why they have central banks in the first place – so they can borrow money with a promise to pay, backed by a printing press and a lot of blank paper. Tax payers complain, but the press never does.
With all due respect, I don’t have time to begin to debunk this (the usual rule is it takes at least 3x as much text). Perhaps the impression I get is the result of casual drafting. But you give the strong impression you have little practical knowledge either of bank payment systems or foreign exchange trading. Most people who handle “front office” matters have little idea of what happens in the back office. The fact that you treat a messaging system as tantamount to clearing and settlement, when I addressed that issue, is a quick and dirty proof.
If you are simply saying banks can engage in bi-lateral currency trades, we have said that from the get-go.
It would take an exogenous event to kick things off, and perhaps a 8.7 on the Hayward fault or a shallow 6.9 in LA-befitting the culture there, or something even easier to foresee, the Ukraine and Israel falling on our watch, and that’s not including using nukes, imagine the economic tableau if thermonuclear weapons were used once again?
It took awhile for the countries that mattered to agree that all that glitters wasn’t the way forward for them in a 5 year plan from 1931 to 1936, there being the issue of fiat raids on remaining team players by those countries off the hook, sort of speak.
The almighty buck has lost 98.6% of it’s value since 1971 against the barbarous in it takes 2 to contango, and yeah that last 1.4% is gonna be a tough get, experts agree.
I’ve consulted my made in China crystal ball purchased from Wal*Mart which works for about 6 months out and then breaks and you have to buy another one…
It suggests:
…the ‘Goild standard’ going forward, a couple of non-renewables-one that powers the world, the other empowers the world
Why not both?
Dedollarization: Good/.
Gold backed currency: Bad.
Begs the question:
Who actually controls the global communication system which a USD alternative might rely on?Riffing on the mantra “If your business relies on a platform you don’t have a business”, I assume that (for example) “Crypto” currently functions at the behest of those who have sovereignty over the “switches” and that the powers-that-be could block transactions if US dollar hegemony was threatened. However if you have set up an alternative satellite based communications network on the sly which bypasses the complex network of under-sea cables etc, you might have the basis for an alternative global currency…
and…
What are all those satellite launches for? [Ref. Scott Manley on YouTube*]
Pip-pip!
*My eyes glaze over when he lists them; MEGO – very good!
The problem arises from persistent trade imbalances. A country that is always in a trade deficit will have to send some type of IOU to its trading partners and they will have to find the debt useful or will stop trading with that partner. An example would be Greece 15 years ago when it was deeply in debt and had nothing that it could produce and sell to offset its trade deficit. I could see China holding IOUs from most BRICS members and a fair amount of financial pain if those IOUs become worthless. One way around it is helping the country with the persistent trade deficit to be able to move to a trade surplus position where it can pay its debts. That will mean productive investment in that country, which although complex is much more civilized than what they did to the Greeks. Some sort of balanced trade would be the goal, and that would be easier to achieve with cooperation than competition.
Excellent point.
I think, the idea of moving completely away from USD is daft. Firstly because the overwhelming use of USD is in derivatives and such like ,not physical or services trade between nations.
But even within the relatively smaller aspect of physical and services trade there must be and for the foreseeable future a need and a role for USD as the US economy is powerful,
What the BRICS+ seek is separating the useful role of USD from the political.
The main immediate aim is to remove financial sanctions by the US using the USD as a tool for repression.
So taking the oft quoted Russia/India trade as an example. There are ongoing issues with Russia having rupees it can’t spend. But all of a sudden it finds it can spend more on Indian software/AI etc, because it didn’t previously have an incentive to enter into that trade. Then there are millions of Indians looking for a better life, maybe attracted to the Russian Far East? Indian cars competing with Chinese ones in Moscow. Etc Etc. Before long you have a surplus that is manageable and can be transacted in USD because its marginal , transacted by third/fourth tier banks and unusable in political terms.
I think the idea this has to be a ‘big bang’ type of solution is completely wrong. The Euro is not a model to replicate in any form based on any mixture of commodity and fiat.
Slowly slowly catchy monkey.
my understanding is: all of these countries are exporters – who will doing the importing?
Countries that import their exports will accumulate the new BRICS currency.
There are trillions in investment needs by the developing world to actually allow it to develop – funny how that didn’t happen in the last century (versus exporting raw materials at basement prices while acquiring all the negative externalities so the first world can virtue signal its environmental goodness. And if those developing countries actually were paid what their raw materials were worth, they would have more currency to import products of the BRICS and others.
you don’t answer my question; WHO will import if the US decides not to?
I’d think that any settlement system between currencies based on sovereign technology and natural resources would be unable to settle balances at all because the socialization of costs is ignored. It’s the 800 pound gorilla because gradually scarcity and degraded ecosystems accumulate. Is there a separate balance sheet for doomsday? To make global economies balance up with Nature, give back and repair constantly, seems like the big no-brainer. Sovereign currencies need a double-peg to maintain value. Both their own sovereign wealth claims (the usual basket of stuff which should also require social equity standards) and a score of their share of dues – money, reclamation, recycling, research and development, etc. – given back to the global environment, paid to the Bank of Nature.
Way out of my depth here, but just wondering – If a partially gold backed currency is such a bad idea, why are China and Russia buying up so much gold on the world market? I understand India has been buying up silver as well.
Most people will say that gold is a good inflation hedge (which has not been proven true by the way), but this time around I can think of at least two big reasons for holding gold:
1. It’s a hedge on government officials making very poor economic choices. If you think in the next crisis the government is not going to print infinite money to bail out their cronies yet again except a couple of magnitudes bigger, then I’ve got a couple of bridges to sell you.
2. What happens if a country is banned from SWIFT? Countries need a medium of trade that they can trust and gold is one option because it’s not a liability of any one country. I don’t think there will be a gold backed currency, but I believe gold will have a very important role to play in the future when it comes to the settlement of international trades.
As long as trade is deemed as beneficial, people will find a way to trade, US Dollar or no US Dollar, people can barter and settle the difference in gold for example.
Also, watch out for Singapore, it’s a very small, very rich country with a huge exposure to trade and finance (money laundering for rich people among others), the country’s central bank started stockpiling gold sometime last year, so they must have been worried about something.
*Sigh*
Do you see Russia or Iran or Cuba using gold?
Among other reasons, trade transaction volumes GREATLY exceed the value of any conceivable national gold stock.
You also get into the gold standard issue of having to ship gold to settle accounts. That was why the gold standard broke down in WWI. Gold could no longer be shipped safely.
Do you seriously think an Iranian shipment of gold to say China could be made securely?
I think Russia would prefer to receive gold than Indian Rupees.
To your second point, I’ve said before in a different post that gold can always be revalued. According to this, https://unctad.org/system/files/official-document/ditctab2024d1_en.pdf, the total value of international trade in 2023 was around 31 trillion USD, while the total value of all the gold in the world is around 13.6 trillion USD (based on today’s value), so basically given the slow growth of the world’s economies, gold just needs to increase in value by 1.5 in order to cover that annual amount in trade. Given gold price has increased 40% just this year alone, it’s possible that gold will triple in value in say 5 to 10 years time, just in time for some kind of gold based settlement system?
[Folks, I am not telling anyone to buy gold, this is just my own back of the envelope calculation]
Can Iran deliver gold to China securely? I am sure the Chinese can send military planes to Tehran to load the gold if need be. Iran is just a couple of countries over from the western part of China. This year, Iran has increased its import of gold, https://www.tehrantimes.com/news/500203/Iran-imports-6-6-tons-of-gold-bullion-bars-in-March-June, so if they have no issues getting gold in, why would they have issues getting gold out?
In terms of security protocol, I as a layman can think of a couple of ways to reduce risk:
1. Don’t broadcast to the world when and how you will be shipping your gold.
2. Split your gold into multiple shipments. Put some in passenger planes if necessary.
3. Masquerade your gold by putting them into deceptive packagings.
4. Hide trackers within the shipment.
5. etc, etc, I am sure the security industry will have many more applicable tricks.
When the world was still running under the gold standard, countries and merchants had to deal with bad weather and pirates, and yet trade still got done. Nowadays with better technologies, ships have a much lower chance of sinking on long journeys, and piracy is pretty much under control.
”Controlled by Washington”?
It can be destroyed by the USA, but it is not controlled by it.
From the BRICS perspective:
– Bretton Woods was the neo-colonial make-over of the British Empire.
– What unites the disparate BRICS group is a common desire to end the abused dollar hegemony.
– China and other BRICS countries have been buying record amounts of gold in the past few years.
– The price of gold doesn’t go up, the value of fiats is going down – about 25% in the past year or so.
– A trading currency does not have to be backed by gold.
– mBridge is a decentralized multicurrency payment system that can accommodate any currency, including CBDCs.
Please do not misinform readers. mBridge is a Bank of International Settlements project. It is only in the testing phase. “Observing members” as in probable early adopters, include the European Central Bank, International Monetary Fund, Federal Reserve Bank of New York, and World Bank. This is most assuredly not a BRICS project.
https://www.bis.org/about/bisih/topics/cbdc/mcbdc_bridge.htm
This looks to be an implementation of bi-lateral currency trades. It solves none of the problems Michael Hudson and others have raised, that bi-lateral trading results in the suplus country collecting financial assets of the deficit county it may not want all that much of. See Germany with respect to Greece, Russia with respect to Turkiye and India.
“Currently five entities are jointly developing mBridge. They include the Hong Kong Monetary Authority (HKMA), the Bank of Thailand (BoT), the Central Bank of the United Arab Emirates (CBUAE), the Digital Currency Research Institute of the People’s Bank of China (PBC DCI), and the BIS Innovation Hub Hong Kong Centre (BISIH Hong Kong Centre).[1] Saudi Arabia’s central bank joined in June 2024.[2]”
https://en.wikipedia.org/wiki/MBridge
mBridge is a new rail to enable countries to settle cross-border trade. It is not about trade imbalances. That is a separate issue.
https://asiatimes.com/2024/09/bric-by-bric-de-dollarization-only-a-matter-of-time/