The Economics of a Multi-Geopolitical Currency (the BRICS Digital Currency) for International Trade and Foreign Reserves.

This paper: analyzes the determinants of the ascension of an international currency using a micro-founded dynamic general equilibrium model under certain assumptions; evaluates, using the results of the model, the potential for a multi-geopolitical currency, such as the BRICS digital coin, to crowd out a successful and dominant single-state international currency, such as the US Dollars; and examines the implications of the evolution of a multi-geopolitical currency for global public policies and private business strategies. The findings of the model are: that the real demand for money balances of a specific currency is directly proportional to consumption in and favorable political sentiments in support of that currency but indirectly proportional to : the cost of capital in that currency; the demand for real money balances of any other international currency; the price elasticity of demand for goods supported by that currency; and the real cost of output that are invoiced in that currency. The results of the model implies: that given the resource strengthen of the BRICS Group, their continuously evolving manufacturing capabilities, their unwavering political resolve to de-dollarize their global activities, the skewed distribution of global population in favor of the BRICS states and their continued technological development, the BRICS currency stands a high chance of crowding out the US Dollars; and also that an ascendancy of the BRICS coin bolds well for the overall welfare of the global community, given that it can make giant strides in; creating a fairer playing ground for sovereign institutions to access capital for development; upholding the integrity and independence of the monetary and fiscal policies of emerging nations; fostering deeper global peace by bringing an end to the need for any single state to champion numerous wars in defense of its currency; evolving a more diversified global consumption market place; and engendering greater stability for the global financing and investment activities of private firms.