The 15th BRICS summit is set to begin Tuesday in South Africa. According to reports, Brazil, Russia, India, China, and South Africa, and possibly more participants, are exploring a new joint currency, possibly backed by physical commodities such as gold. This comes as 10 countries, including China, already have launched some form of a central bank digital currency, which potentially has profound implications for the future of national security, dollar preeminence, sanctions avoidance, economic competitiveness, and individual privacy.
Nearly four years ago, we issued a call to action to explore a U.S. CBDC—a “digital dollar.” We warned of the risks of eroding the dollar’s preeminent role in international trade and the avoidance of sanctions as foreign states adopt digital currencies that operate outside a U.S.-led world-currency regime. We urged the gathering of “a team of the brightest minds” to “future proof” the dollar for a world of digital networks, while remaining true to American norms and values. Thanks to public sector efforts, including Federal Reserve banks and private sector initiatives, some progress has been made. But more needs to be done, with bipartisan purpose and clear-eyed determination.
