Opportunity for cryptocurrencies?
The BRICS countries are calling for a new world reserve currency. The BRICS group of states consisting of Brazil, Russia, India, China and South Africa is one of the most important structures. The community of emerging countries wants to change the U.S.-dominated world financial system in particular with its own reserve currency, as the Russian news agency Tass reported. The primary goal is to replace the U.S. dollar as the world’s reserve currency. Could this radical request mean a new upswing for cryptocurrencies?
A core concern of the group of states is the transformation of the global economic and financial sphere – that the United States enjoys supremacy in this is undisputed. That is why it is understandable that they want to create alternatives to the dollar-based monetary system. Against the background of the percentage distribution of the world’s population, this is understandable: The BRICS countries are home to some three billion people, whereas the G7 countries are home to only 11 percent of the world’s total population.
Russia as the mastermind?
The timing and the request may come as a surprise, but a closer look at the accompanying circumstances provides clarity again: Due to the sanctions resulting from the Ukraine conflict and the exclusion from the SWIFT system, Russia is no longer able to exercise its full economic power. An alternative is needed, and thus it is understandable why President Putin in particular is putting pressure on the planning of a new world reserve currency under the influence of the BRICS countries: “The question of creating an international reserve currency based on the currency basket of our countries is currently under consideration. We are ready to cooperate openly with all fair partners,” he says.
On the one hand, Putin is under pressure to move, but on the other hand, cryptocurrencies are already establishing themselves as official means of payment in parts of the world: El Salvador and the Central African Republic already relied on Bitcoin and its decentralized promise. Venezuela and Iran are also already trading using cryptocurrencies. And the pro-Bitcoin decision is paying off: the legalization of Bitcoin as a means of payment is bringing El Salvador a boom in tourists. In the first half of 2022, it experienced an 81 percent increase in tourists, according to WTO figures. In total, nearly 1.2 million visitors came. This makes El Salvador one of the countries in which the tourism industry has recovered best from the pandemic.
Role model
The fact that there is money to be made with bitcoin in particular and cryptocurrencies in general has now also been recognized by banks. Most recently, the Bank for International Settlements (BIS) allowed regular banks to hold crypto assets like Bitcoin. With the installation of Bitcoin ATMs in German banks and applications for custody licenses by several major banks, one clearly sees a trend towards the introduction of crypto products to the broad customer base. In the meantime, it seems that the much-maligned dangers and risks of cryptos can be lived with quite well…