Michael Hudson speculated about what the BRICS+ non-currency will look like.

John Maynard Keynes proposed an alternative to holding dollars – something like an anti-Bretton Woods. His aim was to avoid US financial dominance by creating a fiat currency, the bancor. That was not a form of international money, but had a special purpose as an asset of “paper gold,” akin to what the IMF later introduced as Special Drawing Rights (SDRs) in response to the US Government itself needing a bailout as its foreign military spending pushed its balance of payments deeply into deficit during the 1970s war in southeast Asia. Bancors or SDRs could be issued to countries running balance-of-payments deficits to pay payments-surplus countries.

The distinction between a “BRICS currency” and a “BRICS bancor”
This is the problem that the BRICS+ and Global South countries are trying to solve today. The popular press has confused matters by referring to a “BRICS currency.” It is not a currency like the euro or the ruble or renminbi. It is not a currency that anyone could spend at the grocery store or to pay rent. It is not “money” as generally understood. It is not a currency that can be traded on foreign-exchange markets, and certainly cannot be bought by speculators (although they could gamble on what it might exchange for, something like betting on a horse race without having a horse or jockey in the race).

Domestic money, like the dollar or euro, ultimately derives its value from being accepted by national governments in payment of taxes or other transactions with the public sector. That makes such money fungible. Money in that sense can be thought of as a public utility. But providing such currency for a number of countries requires a common government, fiscal authority and legal system. If the currency is to be issued by a number of countries – like the euro – it therefore requires a political union empowered to allocate who gets how much of the currency. No such political foundation yet exists for the BRICS. In President Putin’s words, countries are “at different stages of development.” More to the point, their mutual trade and investment is nowhere near in balance at present. That imbalance is the major problem to be solved, just as it was in 1944-45. It is a balance-of-payments problem, not one of financing domestic government budgets and spending.

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