• Russia and China have reached a decision to utilize gold as the foundation for a proposed alternative international currency system.

• Three potential new countries will likely join the BRICS Alliance during the upcoming August summit.

Following extensive discussions surrounding different currency and commodity combinations, it seems that a consortium led by Russia and China has reached a decision to utilize gold as the foundation for a proposed alternative international currency system, distinct from the US dollar and Euro. According to recent information from Russia Today, a state-funded news outlet, the forthcoming gathering of leaders from Brazil, Russia, India, and China in August may involve the official announcement of this new initiative.

Instances of Currency Alterations: A Historical Perspective

This scenario resembles the historic Bretton Woods conference held in 1944. After the tumultuous period of fluctuating currencies during the Great Depression, the international community established a fresh framework for a gold-based international currency system. The central element of this arrangement involved tying the US dollar to gold at a fixed rate of $35 per ounce.

This setup remained intact from 1933, providing a stable foundation for twenty years of economic stability, peace, and fixed exchange rates. Regrettably, this era concluded when the US dollar was detached from its gold backing in 1971, marking the end of the Bretton Woods system.

Subsequently, numerous governments have endeavored to reestablish an international framework centered around gold. In 2019, the Prime Minister of Malaysia, Mahathir Mohammad, proposed a Pan-Asian currency linked to gold.

In 2009, Muammar Gaddafi of Libya presented a plan for a Pan-African currency known as the gold dinar, drawing inspiration from the historical gold dinar coins used during the reign of Arab Caliphates in North Africa. However, the tumultuous events in Libya in 2011 abruptly halted these aspirations.

Potential New Members of the BRICS Alliance

The BRICS Alliance has a packed schedule ahead in the upcoming month. The annual BRICS Summit is set to take place in the first week of August, encompassing a wide range of topics for deliberation. These include the introduction of a new currency, Russia’s ongoing conflict in Ukraine, and the possibility of expansion.

Numerous nations worldwide have submitted applications to join the BRICS Alliance, while others have expressed their interest in participating or becoming members of the BRICS New Development Bank. 

Prospects for BRICS+ Expansion with Argentina, Iran, and the UAE

Three potential new countries are likely to join the BRICS Alliance during the upcoming August summit. The countries include Argentina, Iran, and the United Arab Emirates.

Argentina has made notable progress in its quest to become a member of BRICS. A key aspect of Argentina’s endeavor involves advancing de-dollarization efforts, as demonstrated by its decision to shift away from the US Dollar in favor of the Chinese Yuan. Recent reports suggest that the New Development Bank (NDB) has informed Argentina that a vote on its inclusion in the bank will occur in August.

Considering the circumstances, Argentina is a strong contender to join Brazil as one of the two South American countries within the BRICS alliance. According to a report from Al-Monitor published recently, Iran participated in a BRICS foreign ministers meeting held in Cape Town, South Africa. 

This presence indicates that Iran has begun taking measures to become a member of BRICS, including submitting an official application. Notably, the Chinese ambassador to Iran, Chang Hua, expressed China’s endorsement of Iran’s inclusion in the BRICS bloc. As a result, Iran has already established a presence within the BRICS Alliance, with potential prospects for further engagement.

The addition of the UAE to BRICS strengthens the economic capacity of the alliance, providing it with the means to challenge the dominance of the US dollar. With its robust and diversified economy, the UAE holds significant influence as a key player in the Gulf region. Its economic pillars include sectors such as oil and gas, finance, trade, tourism, and logistics.

Given its strong position, the UAE emerges as a highly favorable candidate for joining BRICS+ in the event of potential expansion in August, alongside Iran and Argentina.