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111 sats \ 12 replies \ @TheBTCManual 5 Mar
Lol BRICS token will end up being a rug pull just like the rest, could have just used Bitcoin but noooOoooo we need supply elasticity, if none of them could manage their own national currencies what would combining help? Sigh, this is all so tiresome
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10 sats \ 11 replies \ @arrivederci OP 5 Mar
If it's a BRICS stable coin or stable coins for various BRICS national currencies then it could make some sense.
I wouldn't discount what they might be moving towards before we actually know the details.
Finally,
There has been no better management of a national currency than what Russia has done over the last 2 years (under severe stress). Russia might have the only central banker who really knows what they're doing.
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0 sats \ 6 replies \ @Bell_curve 5 Mar
The ruble is so dependent on the price of crude oil.
When USA 🇺🇸 oil production is high then ruble is weak because oil prices are low.
You saw this during the Cold War especially the 1980s.
The 1970s oil shocks made USA 🇺🇸 weaker most of it self inflicted. Price controls discourage production. Conversely the oil shocks made ruble stronger
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10 sats \ 5 replies \ @arrivederci OP 5 Mar
I agree that this was once largely true (and agree with your historical analysis).
However I don't believe it is nearly so true today. Russia now has more productive industrial capacity than Germany, at least according to this source. As more intelligent observers forecast, and as most have now conceded with hindsight, the economic sanctions have helped boost Russia's industrial base, as they have been forced to make a lot more stuff themselves. There's a manufacturing boom going on in Russia right now, even as Europe undergoes deindustralisation. Indeed, I've heard of some German industry moving to Russia (e.g. the chemical industry, which is heavily energy intensive), along with it moving to the USA and China.
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0 sats \ 1 reply \ @Bell_curve 5 Mar
Interesting
Thanks for sharing
I guess western sanctions backfired big time
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10 sats \ 0 replies \ @arrivederci OP 11 Mar
This is a very good summary of how the sanctions backfired, by Professor James Galbraith :
(13 minute video)
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0 sats \ 2 replies \ @joda 5 Mar
Won't Russia also have diversification in other commodities once they again Ukraine?
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36 sats \ 1 reply \ @arrivederci OP 5 Mar
Not sure I properly understand your question but with or without the Donbas (where the resource richness of Ukraine mostly lies) Russia is already a superpower across a range of commodities. But while they may have suffered 'Dutch Disease' in the past (commodity wealth suffocating economic development) I don't think that's such a problem for them going forward, mainly because Putin has seen off or reversed the attempted neoliberal takeover of the 90s (which would have turned Russia into a commodity oligarchy ultimately controlled by Western interests, and came close to doing so). With the right political structures / leadership in place, a nation can see off commodity wealth degrading its economy. Norway being a good example of how to do it, on a smaller scale. (Although Norway is starting to show worrying signs these days.)
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26 sats \ 0 replies \ @Bell_curve 5 Mar
Norway 🇳🇴 is not EU member
Norway 🇳🇴 is the largest exporter of oil and natural gas in Western Europe
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0 sats \ 3 replies \ @TheBTCManual 5 Mar
How does it help to have stablecoins for each country? These countries don't really want or need so much foreign reserves of each others currencies? You can already see Russia sitting with a crap load of rupees and have no idea what to do with them, trade imbalances become more complex because usually you'd just use USD and the excess but into treasuries.
You can't really do that with BRICS, these countries don't want to deal with each others bond markets or really bid up local equity markets with the excess capital
The whole BRICS thing was meant to be a reserve asset, like a gold backed something, that you can dump into if you have excesses you cant now put into Tbills
Nabulina has done okay but I mean really its more to do with the oil and gas demand propping things up, they had to raise interest rates to 16% basically double'd and take a 42% devaluation gainst USD
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20 sats \ 2 replies \ @arrivederci OP 5 Mar
I agree that currency exchange imbalances looks problematic between Russia and India. However Russia and China both have things the other country wants/needs so that can work well, and I think China as a commodity importer and manufactured goods exporter can have good currency exchange relationships with a number of other BRICS countries too (e.g. Saudi Arabia and Brazil).
If you have a national currency I think it makes sense to have a stable coin for that currency too. Quoting from the article :
And I think stable coins do make things more convenient for 'common people and businesses' as they are digitally native tokens and thus allow for easier transactions without necessarily having to deal with banks. This includes small to medium importers and exporters, of course.
Finally, I of course agree with you that they need to properly look at Bitcoin, as it's clearly the end game (at least clear to us). But I think individual countries will do this by themselves and privately, and if they start buying they won't announce it. In the meantime, arrangements for stable coins can be publicly worked out and I believe they can help commerce and help BRICS countries move further away from using USD as an exchange currency.
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10 sats \ 0 replies \ @Bell_curve 5 Mar
Stable coin adoption will enable bitcoin adoption in the future
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0 sats \ 0 replies \ @TheBTCManual 5 Mar
For sure there's an element of promoting more cross-border trade, but all BRICS nations are commodity producers, China and to an extent, India do produce finished goods, maybe the capital flowing between others does expand the diversity of the economies to trade in more goods, who knows?
I'm not yet convinced of retail use. Stablecoins appeal isn't only the convience, it's the ability to get dollars/dollar exposure without a bank account and without limits on amount, fees, and clearing times.
In South Africa for example there are 2 private companies with local stablecoins no one wants them, people who are banked already have digitally interopetable money with merchants, and unbanked people have cash, so where do stablecoins come in?
Stablecoins have no local interoperability, the stablecoin appeal is to get money out of the local system in a relatively stable store of value. Dollars have performed very well as a savings tool versus holding cash, interest accounts, or even local equities.
What is the appeal for me to get a ruble, rupee, or renminbi stablecoin? It's not giving me any relative protection as a retail user.
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0 sats \ 0 replies \ @Bell_curve 5 Mar
They need to create alternative payment system that can circumvent sanctions or freezing of their payments channels with the west
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