(Transcribed from recordings, with some edits)
When discussing the relationship between and prospects of the BRICS currency reserves and payment system, it is crucial to recognize that the Kazan Summit did not explicitly propose plans to issue a BRICS currency in its declaration, though Putin presented a 100-unit BRICS currency mockup at the meeting and garnered wide attention. Instead of issuance, the summit more frequently emphasized establishing a BRICS payment system, and authorized central banks and finance ministers of BRICS nations to advance research on currency cooperation and payment system operations, with a report due at the next summit. This arrangement represents progress over the previous summit, where discussions were led by specialized working panels, rather than direct engagement by finance ministers and central bank governors.
As early as 2013, I proposed the concept of BRICS currency in my essays, discussing its core frameworks including transaction rules, issuance mechanisms, exchange rate setting and system expansion. These ideas were submitted to the State Council for reference. In recent years, this vision has received increasing attention, including Medvedev’s call for creating a new global currency and research done by the New Development Bank. There are also emphasized principles such as avoiding replication of the euro model, preserving sovereign currency differences and refraining from gold pegging. These concepts align closely with my statements over a decade ago.
This vision arises against the dollar hegemony. As the world’s primary reserve currency, the U.S. dollar lacks internationally recognized balance mechanisms in its issuance and usage. The Federal Reserve, whose equity is held by private banks, operates monetary policies independently from the U.S. government. This means the U.S. dollar is not fully a sovereign currency to some extent. The structural imbalance stemming from dollar hegemony manifests as the following. The U.S. sustains long-term trade deficits by leveraging the dollar’s global position, while issuing dollars at an exchange rate above their actual value. During times of financial crisis, it employs monetary tools to resolve domestic issues and acquires high-quality assets from other nations. It even directly targets economies like Venezuela, Iran, Afghanistan, North Korea, Cuba and Russia through sanctions.
In this context, developing countries must unite to introduce a supranational currency – namely the tentatively termed “BRICS currency” – to establish a new international monetary system. Its core mechanisms should be: all intra-system trade settlements would be conducted exclusively in the BRICS currency, with no direct bilateral exchange between sovereign currencies; member states would retain independent monetary and fiscal policies; exchange rates, issuance and expansion rules would be jointly determined by member states. To realize this system, an independent payment platform separate from SWIFT must be established to incorporate all cross-border payments into an autonomous system. This is not only a prerequisite for smooth operation of the BRICS currency, but also a safeguard for financial security.
The launch of the BRICS currency will inevitably challenge the fundamental interests of the dollar system, potentially prompting strong countermeasures from the U.S. However, this system does not need to encompass all BRICS nations from the outset. It can be introduced with the agreement of just two countries and gradually expanded to attract more member states. As membership grows and its influence increases, even the U.S. may be compelled to engage in negotiations. A new international monetary order will be advanced.
It is worth noting that, though the internationalization of Chinese RMB can serve as one pathway toward de-dollarization, this method cannot change the inequities in the international monetary system if it is solely advanced within the existing mechanism. Therefore, building a fair, just and inclusive BRICS currency system is not only about economic interests, but also has the potential to lay the foundation for realizing a community with a shared future for mankind.