Putin plots new currency for the BRICS in his latest attempt to end the dominance of the US dollar

Not many people outside Russia have heard of Kazan.

But if the architects – or midwives – of the planned new payment system for the BRICS have their way, it could one day be as famous – to economists at least – as Bretton Woods, the birthplace of our current international payments system. in July 1944.

The heads of the BRICS – Brazil, Russia, India, China and South Africa – agreed closer financial cooperation last month at a conference hosted by Vladimir Putin in the city.

In the future, this may even be accompanied by a new common currency and international payment system.

The star of the show was Putin, whose name appears on an arrest warrant issued by the International Court of Justice over his country’s invasion of Ukraine.

But the driving force and ambition behind this move – which is clearly aimed at the US and its Western allies – is China.

The goal is to end the dominance of the US dollar in international trade and investment. That has brought the group together and made it attractive to countries such as Iran, Egypt, Ethiopia and the UAE, which are already part of the broader BRICS+ group of emerging economies.

Saudi Arabia and a number of smaller African and Asian countries are apparently knocking on the door. With almost 50% of the world’s population, it certainly deserves to be taken seriously.

The new payment system will likely be an ambitious blockchain-based cryptocurrency.

The attitude of the countries involved also has an interesting political raison d’être, and not merely an economic one.

Like the leaders of China and Russia after the demise of communism, they embrace a kind of state-led capitalism and a top-down system of governance – in contrast to our Anglo-Saxon capitalism with its liberal democracy and the rule of law.

They claim that the latter is unsuitable for their population at the current stage of development, but the real reason could be that they would rather not have their own political future determined by free elections.

Assuming it is not hampered by too many internal restrictions, the currency and payment system could therefore succeed even on the international stage.

Especially since the US is about to be led by a man who puts America first and international issues second.

They may think their chances are pretty good. However, there is a view in Western banking circles that the new currency idea will be difficult to get off the ground.

Maybe. But it’s worth keeping a close eye on Donald Trump – and the rest of the Western world.

• Bob Bischof is vice-president of the German-British Chamber of Industry and Commerce