New Currencies in the International Financial Architecture: A Hypothesis of the BRICS Currency Unit

Abstract

The subjects of the research are the transformation of the international financial architecture resulting from the internationalization of some currencies of the BRICS countries, mainly the yuan; the position of the BRICS currencies in the world monetary system; and a possibility of creating a common payment unit in the context of collective currencies, cryptocurrencies and similar monetary and financial products. Based on the correlation analysis of the dynamics of the BRICS currency quotations, the paper expresses a hypothesis about a possibility of concluding a monetary union and creating a common BRICS currency. The purpose of the research was to develop the principles of creating a common payment unit for the BRICS countries both for mediation of international economic relations and for wider international circulation. Based on the methods of analogy, comparative analysis, plotting and statistical forecasting, it is proved that the BRICS currency cannot be built on the cryptocurrency principles. It is stated that emission of the BRICS currency as a cryptocurrency will lead to the anarchy of currencies, which will naturally create conditions for the destruction of the monetary union, elimination of the new currency and preservation of the dollar dominance in the global monetary system. The novelty of the research findings lies in obtaining a formula for calculating the amount of the new BRICS currency needed for international circulation. The theoretical significance of the research is the development of a methodology for establishing the exchange rate of the collective currency for the BRICS countries. The practical importance of the research findings is manifested by determining a potentially new BRICS exchange rate in relation to the currencies of the leading countries, plotting the BRICS currency exchange rate trends to predict the limits of currency fluctuations in accordance with the scenarios from the most optimistic to the most pessimistic.