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 <p>Brazil’s President Luiz Lula da Silva said on Wednesday that <a rel="noopener noreferrer nofollow" title="BRICS" href="https://thebittimes.com/tag/brics.html">BRICS</a> is discussing setting up a new currency for global trade. The settlement currency will be used for cross-border transactions among member nations and will do away with the U.S. dollar. <strong>“We have agreed that our finance ministers will discuss this issue over the coming year to see if we can agree on the creation of an accounting currency for exports by the next meeting,”</strong> he said to Reuters.</p> 
 <p><strong>Also Read: After BRICS, G20 Summit in the Spotlight</strong></p> 
 <p>Therefore, BRICS might have a new settlement currency before 2025 and end dependency on the U.S. dollar. The Central Banks of member nations are discussing ideas for the new currency formation. In this article, we will highlight what are the challenges that BRICS will face while setting up a new currency.</p> 
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 <h2 class="wp-block-heading" id="h-what-are-the-challenges-to-set-up-a-new-brics-currency">What Are the Challenges To Set up a New BRICS Currency?</h2> 
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   <img decoding="async" width="1000" height="563" src="https://cdn.thebittimes.com/images/2023/09/01/69bc1e56e6a72cb8b03e8b7d66dc005a.webp" alt="US dollar Chinese Yuan BRICS Currency" class="wp-image-104548" srcset="https://cdn.thebittimes.com/images/2023/09/01/69bc1e56e6a72cb8b03e8b7d66dc005a.webp 1000w, https://cdn.thebittimes.com/images/2023/09/01/69bc1e56e6a72cb8b03e8b7d66dc005a.webp 300w, https://cdn.thebittimes.com/images/2023/09/01/69bc1e56e6a72cb8b03e8b7d66dc005a.webp 768w, https://cdn.thebittimes.com/images/2023/09/01/69bc1e56e6a72cb8b03e8b7d66dc005a.webp 380w, https://cdn.thebittimes.com/images/2023/09/01/69bc1e56e6a72cb8b03e8b7d66dc005a.webp 550w, https://cdn.thebittimes.com/images/2023/09/01/69bc1e56e6a72cb8b03e8b7d66dc005a.webp 800w" sizes="(max-width: 1000px) 100vw, 1000px"> 
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    Source: thecradle.co 
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 <p>The <a rel="noopener noreferrer nofollow" title="BRICS" href="https://thebittimes.com/tag/brics.html">BRICS</a> alliance will encounter multiple challenges while setting up a new currency for trade settlements. The main challenge is how to survive the fluctuating foreign exchange markets and remain stable despite volatility. After ending reliance on the U.S. dollar, the currency will have to find new ways to back its value. It could be backed with gold or other existing local currencies in the markets.</p> 
 <p><strong>Also Read: Second BRICS Expansion So</strong><strong>on: South African PM Makes Huge Announcement</strong></p> 
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 <p>Below are the six challenges that <a rel="noopener noreferrer nofollow" title="BRICS" href="https://thebittimes.com/tag/brics.html">BRICS</a> will face during the creation of the new settlement currency. They also need to build unions and create a framework to gain the trust of other countries on the international stage.</p> 
 <ol> 
  <li>Banking Union</li> 
  <li>Fiscal Union</li> 
  <li>Macroeconomic Convergence</li> 
  <li>Exchange Rate Volatility</li> 
  <li>Institutional Framework</li> 
  <li>International Market Trust</li> 
 </ol> 
 <p><strong>Also Read: <a rel="noopener noreferrer nofollow" title="BRICS" href="https://thebittimes.com/tag/brics.html">BRICS</a>: Total GDP of All 11 Member Countries</strong></p> 
 <p>South Africa’s Central Bank Governor Lesetja Kganyago highlighted a few points that the <a rel="noopener noreferrer nofollow" title="BRICS" href="https://thebittimes.com/tag/brics.html">BRICS</a> currency will face during formation. <strong>“You’ll have to get a banking union, you’ll have to get a fiscal union, you’ve got to get macroeconomic convergence,”</strong> Kganyago said.</p> 
 <p><strong>“Importantly, you need a disciplining mechanism for the countries that fall out of line with it Plus they will need a common central bank,”</strong> he said.</p> 
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<div class="cs-entry__tags"> 
 <ul> 
  <li>BRICS</li> 
  <li>BRICS Currency</li> 
 </ul> 
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/brics-what-are-the-challenges-for-setting-up-a-new-currency-tbt61233.html">https://thebittimes.com/brics-what-are-the-challenges-for-setting-up-a-new-currency-tbt61233.html</a></p>

BRICS: What Are the Challenges For Setting Up a New Currency?

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