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BRICS Summit Puts Focus On Dethroning US Dollar As Putin Unveils 'BRICS Banknote'

Tyler Durden's Photo
by Tyler Durden
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It's an outcome that alternative economists have long predicted as inevitable - The dumping of the US dollar as the world reserve currency and the petro currency by the BRICS nations in favor of a new multi-currency system or "basket system."  For decades the dollar has reigned supreme as the most favored currency for international trade, replacing the British Pound Sterling (officially) after the Bretton Woods Agreement in 1944. 

This status (along with the end of the gold standard) gave the Federal Reserve Bank the power to print cash with wild abandon without facing immediate inflationary consequences.  As long as dollars are held overseas by foreign governments, banks and corporations, inflation in the US can be mitigated despite quantitative easing.  If the dollar loses reserve status and the trillions of dollars stored in foreign markets flood back into the US economy, an inflationary disaster would result well beyond what America is already dealing with today.

Given this fact, it's not surprising that Vladimir Putin avidly discussed the potential of a new BRICS currency system during the trade coalition's summit this week in Kazan, Russia.  He knows that the dollar's reserve status is America's strength, but also America's greatest weakness. 

Putin unveiled a "symbolic" BRICS bank note at the summit, suggesting that the plan to dump the dollar may be much closer to fruition than many economists expect. 

Another central topic of the conference was the development of an alternative to the SWIFT payment system controlled by the US and Europe.  The SWIFT system is the most efficient mechanism for governments and international banks to transfer large sums of money from one country to another.  Russia was banned from using SWIFT after their invasion of Ukraine which many western analysts claimed would destroy Russia's economy.  This did not happen.

NATO sanctions ended up pushing the BRICS closer together, with China and India greatly increasing trade with Russia and China forming more defined military ties with the Kremlin.  

Every plan to replace the dollar has revolved around the concept of central bank digital currencies (CBDCs) as a means to circumvent the dollar's reserve advantage while also defeating the monopoly of the SWIFT network.  The BRICS are also not the only entity working on such a plan.  

Globalist bankers at both the IMF and the BIS have been developing digital alternative to the dollar system for years, with the BIS already testing CBDCs in multiple countries including Australia, Saudi Arabia and China with the intent to introduce a cashless economy in the next two years.  The BIS calls this 'Project mBridge'.

In other words, the naysayers that claim the dollar will not be replaced as the world reserve for many decades to come are delusional.  The process is already well underway. 

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