‘The BRICS summit could lead to significant changes in the global financial agenda”: Alexei Kushch
The issue of foreign exchange rates is of particular concern to Ukrainians, as it directly affects the country’s economic stability and the well-being of its citizens.
Fluctuations in the dollar and euro exchange rates can lead to changes in prices for goods, services, imports and exports, as well as in the conditions for investment in the economy.That is why news about possible changes in the global financial system is worrying, as future decisions may affect the stability of global currencies, including the Ukrainian hryvnia.Significant shifts in the global currency balance, which are being prepared by the BRICS countries, are now on the horizon, and this could have far-reaching consequences for the entire global economy.
The upcoming BRICS summit in Kazan at the end of October could be a real turning point in the global financial system.Economist and financial analyst Oleksiy Kushch believes that the meeting will discuss the creation of a new global financial system that will be able to weaken the influence of the dollar and euro.
According to the expert, the agenda of the BRICS summit includes specific items related to the creation of an alternative financial infrastructure. One of the main aspects of this discussion will be the development of three key elements:
- The BRICS Cross-Border Payment System.It includes three digital currencies (RMB, Rupee, Ruble), a clearing system for transactions that will operate around the clock without commissions, and multi-frequency exchange rate formation based on smart contracts. This is aimed at reducing dependence on the dollar, as a significant portion of settlements will be transferred to the BRICS digital platform.
- The BRICS Securities Depository, which will be analogous to the European Euroclear.This system will hit the European depository infrastructure and its profits.
- The BRICS reinsurance system, which will compete with British insurance companies that control a significant part of the reinsurance markets.
Oleksiy Kushch reminded that the BRICS already has a New Development Bank, headed by Dilma Rousseff, former president of Brazil. The main goal of this bank is to create a parallel financial system for the BRICS countries. This system will consist of two parts: an onshore system that maintains links with the classical financial systems of the West (the dollar and the euro), and an offshore digital system that will focus on internal transactions between the BRICS countries and their partners from other countries.
“This is the revolution of the Global South in practice against the non-equivalent global exchange of the West’s fiat reserve currencies for the material resources of developing countries.
And, of course, one of the goals is to circumvent sanctions and prevent the blocking of BRICS assets in the future.
I have analysed the BRICS analytical report on the creation of an alternative financial system and found an interesting plate.
At the moment, the world has blocked:
$120 billion of Iran;
$300 billion of the Russian Federation;
168 billion dollars of Libya;
12 billion dollars of Afghanistan;
31 tonnes of Venezuelan gold.
And this is not a penny of the blocked funds of the DPRK or Syria.
You can live on this money…,” Kushch emphasises.
These frozen assets are significant, and the new BRICS financial system can help countries avoid such risks in the future.
Thus, the BRICS summit in late October could lead to significant changes in the global financial agenda, and these decisions could pose a real challenge to the dominant currencies, the dollar and the euro.
