Lula proposed this new BRICS currency in the context of a world that must embrace free trade and multilateralism. The Brazilian leader acknowledged that the proposal presents several challenges but emphasized that it is necessary for the benefit of humanity.
Lula: Development of New BRICS Trade Currency Is Extremely Important
The emergence of a BRICS bloc trade currency could disrupt global trade settlements. Brazilian President Luiz Inácio Lula da Silva proposed the idea of a new trade currency for the bloc, which would enhance settlements and support a multilateral world.
In his opening remarks at the 10th annual meeting of the New Development Bank (NDB), a BRICS institution, Lula presented the trade currency as a tool to counter the austerity policies imposed by world powers on the poorest countries.
Lula stated:
The debate over the need for a new trade currency is extremely important. It’s complex, I know, and it presents political problems, I know, but if people don’t find a new formula, the 21st century will end the same way the 20th century began, and that will not be beneficial for humanity.
Furthermore, he called on NDB President Dilma Rousseff to collaborate with other world banks to demonstrate that new financing policies are possible.
The Brazilian leader warned that if these goals are not achieved, democracies may suffer, as multilateralism is facing its worst moment since its inception after World War II.
The concept of a BRICS currency has been in the spotlight several times before, but the organization has preferred to focus on developing national-currency-based exchange mechanisms instead.
Nonetheless, even President Trump has acknowledged the potential threat posed by the hypothetical launch of such a currency to the hegemony of the U.S. dollar. In December, he threatened BRICS with tariffs of up to 100% on countries issuing a new currency or abandoning the U.S. dollar, stressing that they “should expect to say goodbye to selling into the wonderful U.S. economy.”
