Journal of Siberian Federal University. Humanities & Social Sciences / The Digital Transactions Currency for the BRICS

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Journal of Siberian Federal University. Humanities & Social Sciences. 2020 13 (11)
Zharikov, Mikhail V.
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Zharikov, Mikhail V.: Financial University under the Government of the Russian Federation Moscow, Russian Federation; ; ORCID: 0000-0002-2162-5056
BRICS; digital transactions currency; payment system; quantity of digital money; purchasing power parity of the digital currency; digitization; cryptocurrency; financial innovation

The article deals with the circulation of a digital currency as a worldwide problem. The topic has theoretical and practical significance because price stability, economic growth and development and market equilibrium depend on the quality of this circulation. Currency digitization has become a particularly acute issue with the outbreak of COVID-19, which made central banks to think about contactless means of payment. The research identified the significance of the most important macroeconomic indicators which may characterise the hypothetical shared digital currency for the BRICS, namely, a shared interest rate and the quantity of digital money in circulation needed for the international use. The exchange rate of the BRICS digital currency, if it ever goes into being, is going to heavily depend on the amount of the interest rate of the hypothetical creditor of last resort. This problem is quite significant, since for the international circulation it is very important to know the proportions in which the digital currency is to be exchanged for the currencies of other countries. The theoretical significance of the article is the development of a model’s basis to find the exchange rate of the digital currency. The practical significance of the paper is that it contains recommendations for foreign-exchange-market players to optimise their investment portfolios as well as for monetary authorities in the emerging economies to make some policy choices

Paper at repository of SibFU

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