Hey there! 🌟 Have you ever traded toys or cards with your friends? Imagine if you could only trade using one special coin, even if you had your own coins. Sounds tricky, right?
Well, in the world of countries, something similar happens! Many countries trade using US dollars, even if they’re not from the United States. But now, the BRICS countries — that’s Brazil, Russia, India, China, and South Africa — are thinking, “What if we used our own money instead?” 💡
Why Use Their Own Money?
You might wonder why they’d want to do that. 🤔 Well, sometimes relying on someone else’s currency can be risky. For example, in 2022, Russia’s dollar assets were frozen, which was a big problem! So, the BRICS nations thought it would be safer to use their own currencies when trading with each other.
The Challenges They Face
But it’s not as easy as it sounds. Here are some challenges:
- Money Values Change 🤑
Currencies (that’s the money each country uses) can change in value. One day, one dollar might be worth 70 rubles, and the next day, 75. This makes trading tricky because you might not know exactly how much you’re getting or giving. - What If You Can’t Use the Money? 🤷
Imagine collecting shells as payment, but none of your friends accept shells. That’s a problem! Sometimes, a country ends up with a lot of another country’s money that they can’t easily use elsewhere. - Making It Work for Everyone 🤝
They need to make sure that not just big banks, but also regular businesses, can use these new systems easily and legally.
Possible Solutions
To solve these problems, the BRICS countries are thinking of:
- Creating a Shared Pool 🏊
Think of it like a big piggy bank where each country puts in some money. They can then exchange currencies more easily. - Setting Up Rules Together 📜
By agreeing on rules, they can make sure currencies are exchanged fairly and safely.
Why Is This Important?
By using their own currencies, BRICS countries hope to have more control over their money and reduce risks. It’s like playing a game with your own cards instead of borrowing someone else’s!
Wrapping Up
This is a big step for the BRICS nations, and while there are challenges, they’re working together to make international trade smoother using their own currencies. 🌐💰
So next time you trade with your friends, think about how countries trade too! Cool, right? 😎
Reference(s):
BRICS currency settlement: Promise and institutional challenge
cgtn.com
