BRICS Coin Cryptocurrency on the Agenda
Kirill Dmitriev, the Head of the Russian Direct Investment Fund (RDIF) has stated that the BRICS countries might discuss the possibility of creating the organization’s own cryptocurrency as an alternative to other payment systems. This fits in with existing preferences, where the BRICS member states prioritize payments made between the countries in their own currencies.
“Another topic discussed by the financial committee was cryptocurrencies. The creation of BRICS’ cryptocurrency as an alternative to other payment tools might also be discussed. However, cryptocurrencies are also being discussed as one of the possible options for financial settlement. For particular payments it might be quite relevant and serve as a good alternative to the dollar or any other currency. We estimate that the mutual investments of the BRICS countries might see an increase by 3-4 times due to such instruments as BRICS New Development Bank“, Dmitriev said.
The Chinese regulator has cracked down on the use of bitcoins in China, and has banned the use of cryptocurrency crowdfunding methods, leading to a global slump in the price of the digital coin this week. China also announced a regulatory clampdown on initial coin offerings (ICOs). Many new startups in China have been relying on ICOs as a means to raise funds by selling off new digital tokens to the market, partly as they find it hard to borrow money from China’s state-owned banks, who are essentially wedded to China’s state-owned companies and find it hard to support small businesses, a continuing entrepreneurial issue in China. There is demand – total ICO investments in China have reached over US$1.2 billion.
Russia’s President Putin has also called for more regulation in the cryptocurrency market, although Russia has also been exploring plans to launch the Kryptoruble.
“Using cryptocurrencies as settlement tools amongst trading blocs makes a lot of sense”, says Chris Devonshire-Ellis of Dezan Shira & Associates. “The currency can be jointly regulated and managed and if necessary, used purely as a government, rather than private sector tool, alleviating security concerns. There is growing demand for less dependence on the US dollar and its cumbersome, political, and expensive trading infrastructure. We will see an alternative currency develop and I foresee several cryptocurrencies being issued within trade blocs in the future, with ASEAN being a primary example of a need for this sort of settlement tool.”
About Us
Silk Road Briefing is produced and written by Dezan Shira & Associates. The firm provides governments and corporate businesses worldwide with strategic, legal, tax and operational advisory services to their SMEs and MNCs investing throughout Eurasia and has 28 offices across China, India, Russia and the ASEAN nations, and partner firms in Central Asia. We have specific and long term experience in China and the OBOR countries. For assistance with OBOR related issues, please contact the firm at silkroad@dezshira.com or visit the practice at www.dezshira.com
Related Reading:
Leningrad Oblast Looking to Legalize Bitcoin for Estonian, Finnish Trade
Silk Road and OBOR Business Intelligence
Dezan Shira & Associates´ Silk Road and OBOR investment brochure offers an introduction to the region and an overview of the services provided by the firm. It is Dezan Shira´s mission to guide investors through the Silk Road´s complex regulatory environment and assist with all aspects of establishing, maintaining and growing business operations in the region.
China’s New Economic Silk Road
This unique and currently only available study into the proposed Silk Road Economic Belt examines the institutional, financial and infrastructure projects that are currently underway and in the planning stage across the entire region. Covering over 60 countries, this book explores the regional reforms, potential problems, opportunities and longer term impact that the Silk Road will have upon Asia, Africa, the Middle East, Europe and the United States.
Dezan Shira & Associates
