Unified currency for BRICS mooted

David Monyae, director of the Centre for Africa-China Studies at the University of Johannesburg Confucius Institute, said in addition to increasing trade among themselves in local currencies, BRICS countries should also consider having a digital currency.

'Easy, efficient'

"If they can speed up the process, it will be more easy, efficient and we will have a positive impact on global trade and the economic strength of these countries," Monyae said.

Against the backdrop of the complexity surrounding the establishment of a unified currency for BRICS, Li said the yuan could be a choice for an alternative currency.

He said many of the BRICS countries are already adopting the yuan as a currency of trade and including it in their reserves.

South Africa, for instance, has a swap agreement with China even though it's yet to draw down on the swap line.

Russia was using the yuan in trading with China.

"As the yuan becomes more accepted in global trade scenarios, an alternative system to the Western financial order may evolve," he said.

Li said the Cross-Border Interbank Payment System, or CIPS, China's answer to the Society for Worldwide Interbank Financial Telecommunications, or SWIFT, is currently in development.

"Many Chinese state-owned enterprises and strategically important corporates, in fear of being shut out from global settlement if excluded from SWIFT, are partaking in the new cross-border payment system," he said.

Li is of the view that increasing the usage of each other's currency and having a direct exchange bypassing the dollar could be a more realistic, closer and low-hanging fruit for BRICS nations to consider.

He noted that the yuan may not challenge the dollar's status as the preferred currency of global trade in the immediate future.

"There are many hurdles for the yuan to overcome in order to become a globally accepted currency. The best comparison should be the Japanese yen. Now, the yen has a better overall weighting in the basket than the yuan," he said.

"The goal of yuan internalization ought not to be replacing the dollar, but to support and protect the trade networks between China and African economies," Li said.