Proposals for New Common Currency Resonate in Latam, to Undermine U.S. Dollar Reliance Cryptocurrency
Two new proposals for a new common currency to be established in Latam have been made recently. Former Brazilian President and candidate Luis Inacio Lula Da Silva floated the idea in May, and Colombian Congress President Roy Barreras raised the same idea during the inauguration of President Gustavo Petro earlier this month. The idea behind this would be to reduce the region’s dependence on the US dollar.
Lula and Barreras propose a common Latin currency
The proposal to establish a new common currency between Latin American countries has been revived due to the current economic situation that some of these countries are facing. Two politicians from the region, former Brazilian President Luis Inacio Lula Da Silva, and the President of the Colombian Congress, Roy Barreras, have recently called for the initiative to be reconsidered.
Last month, Da Silva said that if he won the presidential elections (he is one of current President Jair Bolsonaro’s contenders in the general ballot held in October), he would support the creation of a common currency for Latam. . Called “sur” (SUR), translated as “South”, this currency would ostensibly strengthen integration between the countries of the region. At a rally in May, he declared:
We are going to create a currency in Latam, because we cannot continue to depend on the dollar.
Moreover, it would present a new opportunity to contain inflation in the region, a problem that countries like Argentina and Venezuela are currently struggling with. The sur could allow countries to retain their central bank autonomy, unlike the model adopted by the European Union, and the dual circulation of national fiat currencies and the sur would be allowed.
More recently, Roy Barreras has also called for the establishment of such a currency, without giving details of its specificities. During the inauguration of the recently elected Colombian President, Gustavo Petro, Barreras said:
Here is a homeland ready to be reborn, so that, hand in hand with other Latin nations, we decide to share a common destiny, a single competitiveness agenda, a binding latam parliament, hopefully a single currency, and above all a only worthy voice.
In July, Russian President Vladimir Putin revealed plans to launch a common currency for countries comprising the BRICS, an organization that also includes Brazil, in what some analysts see as an attempt to compete with the US dollar.
Common Currency Background
The idea of a common currency for Latam is not new. In fact, there was a common currency that was used to settle over $1 billion in transactions across the continent. The currency was called “sugar” and was the result of several countries merging into ALBA, a Bolivarian alternative organization that opposed the US-backed government. FTAA.
Venezuelan President Hugo Chavez was responsible for its creation in 2009 and its adoption in Venezuela, Nicaragua, Cuba, Bolivia and Ecuador. However, the currency was abandoned due to several events, including the imposition of US sanctions against Venezuela and the death of its main supporter.
What do you think of the proposal for a new common currency in Latam? Tell us in the comments section below.
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