Putin Suggests BRICS Look At New Global Reserve Currency Backed With Hard Assets

July 5, 2022 2:40 pm Comments

The president of Russia, Vladmir Putin, just suggested that BRICS countries should start exploring a new potential global reserve currency that is backed by hard assets.

The statement comes during a time when Russia has been attempting to reduce its reliance on Western financial systems like the SWIFT network.

As a result of such an initiative, the country has reportedly been looking at other options such as the crypto industry as well as other alternative mechanisms that can be used for international settlements.

At the BRICS form, one of the ideas that has been floating around is a basket of different currencies as well as using assets like gold and Bitcoin.

Iol.co.za reports:

Previously, Russia had said they would only accept roubles, gold or bitcoin as payment for energy exports to “unfriendly” countries.

No dollars or euros will be accepted. This view is perhaps understandable, given that the Western financial system has told Putin he can no longer use dollars or euros to purchase anything.

As a result, Putin is demanding roubles, gold or bitcoin. And that means the Russian rouble is now backed by commodities exports, making it a currency backed by something real. If you buy roubles, one can trade those roubles for natural gas or oil.

According to Putin: “Let me reiterate, the whole global economy and trade have suffered a major blow, as did the trust in the US dollar as the [world’s] main reserve currency.

The increasing preference for commodities, hard assets, and crypto also stems from multiple economic concerns that are widespread today with the main issue being high rates of inflation.

There is also much discussion on the currency that is being used for the oil trade as oil suppliers traditionally prefer the petro dollar to conduct all trade.

This is because it is a freely convertible currency which makes it easy for everyone to access and hold.

However, the consistent printing of the dollar and Federal Reserve’s monetary policy has caused many within the community to question a fiat-based monetary system.

As a result, many are already claiming that a new financial world order will be coming soon which will be labeled as the “Great Reset”.

Interfax.com reports:

Putin said that Russia is taking comprehensive measures aimed at reducing the negative impact of sanctions and strengthening trade and investment ties with all interested states.

“Our macroeconomic policy is actually demonstrating its effectiveness. We were able to protect the Russian financial system, begin to stabilize the situation in industry, providing targeted social support to citizens,” Putin said.

He also pointed to the fact that Russian authorities are focused on stimulating private initiative.

“We are striving to expand entrepreneurial freedoms, for which we are reducing administrative burdens, launching new preferential lending programs, and introducing tax and customs exemptions,” the president said.

The question that then comes up is what will be the role of digital assets be in the future as the traditional system starts to weaken.

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