The Frogged Bloc's Mortar
2024 BRICS+ summit bulletin
Geopolitics junkies, come get your fix! The 2024 BRICS+ summit now in progress in Kazan, Russia marks a critical juncture for the trading bloc and its growing list of members as they consider expanding their influence beyond talk and into a full-fledged economic powerhouse. For that reason, the summit might indeed mark a turning point in global finance and the international capital order: after all, attendees include not only President Vladimir Putin of the host country, President Xi Jinping of China, Prime Minister Narendra Modi of India, and President Cyril Ramaphosa of South Africa, but also President Masoud Pezeshkian of Iran (which joined the bloc last year) and President Recep Tayyip Erdoğan of Turkey (the NATO member that applied to join BRICS+ in September), to name just a few of the thirty-odd international delegations now gathered in Kazan.
President Luiz Inácio Lula da Silva of Brazil canceled his trip earlier this week after suffering an injury from a fall. We wish him a speedy recovery. Also absent is Crown Prince Mohammed bin Salman of Saudi Arabia, whose country—contrary to our dispatch from February—has been invited to join BRICS+ but has not yet formally accepted membership. We regret the error.
In the run-up to the summit, rumors swirled about the potential launch of a new BRICS+ currency—possibly called “the UNIT”—which could challenge the U.S. dollar’s dominance as the global reserve currency. Blake Lovewell’s “BRICS Coin – The Unit vs The Dollar” offered further details on BRICS+’s potential introduction of a new currency system. This proposed UNIT is designed to counter the dominance of the U.S. dollar, foster economic independence, and promote a multipolar global order. As the digital currency’s May 2023 whitepaper tells us, the UNIT represents a decentralized, “apolitical” global currency system that avoids relying on national currencies by using a reserve basket of assets, with 40% gold and 60% member-nation currencies. Unlike cryptocurrencies or stablecoins, UNIT tokens are backed by these assets but their value fluctuates based on supply and demand, while the system re-balances the reserve basket when new tokens are minted, maintaining a stable composition of gold and non-gold assets to minimize costs related to gold movement and reserve balancing.
The UNIT’s decentralized system, with nodes in various jurisdictions issuing UNIT tokens, under the governance of a Decentralized Autonomous Organization (DAO), ensure financial sovereignty while facilitating efficient cross-border trade. Overall, the UNIT system aims to provide a stable, decentralized alternative to national currencies for international trade.
Though Radio Free Pizza readers surely know that the petrodollar system established in the 1970s has long maintained American economic hegemony, efforts to reduce reliance on the dollar have accelerated: though China’s introduction of the petroyuan six years ago and its rising use in global trade began eroding that dominance (though still accounting for only 5.3% of global trade compared to the dollar’s 84%), the geopolitical climate in recent years has increased pressure on the dollar’s status as global reserve currency following Western sanctions on Russia for its military operations in Ukraine and erupting tensions in the Middle East—has increased pressure on the dollar. More recently, dramatic increases in gold holdings among central banks worldwide have fueled speculations about a coming shift towards a gold-backed currency.
The UNIT would certainly represent a significant shift in global finance. Of course, any shared currency at all would serve the bloc well, acting as the mortar maintaining the structural integrity of the barricade defending its member-nations’ economies against Western imperialism, in addition to enhancing its own internal cohesion and stability: just as mortar fills the gaps between frogged bricks to strengthen a wall, a shared currency binds the economies of member-nations, promoting frictionless trade between them while avoiding any inefficiencies and inconsistencies that might destabilize the bloc. However, the aforementioned Lovewell emphasizes caution, suggesting that while BRICS+ will continue to grow, the formal launch of the new currency might be delayed as the bloc carefully navigates geopolitical dynamics and the declining influence of U.S. hegemony.
Has the BRICS+ summit begun charting a new course for worldwide monetary systems? Let’s dive into what’s at stake as BRICS+ looks to challenge the dominance of the U.S. dollar and redefine the world economy.
Alexander Gabuev and Oliver Stuenkel covered the summit for Foreign Affairs at the end of September, discussing the rise of BRICS+ and how its future could shape global order. The bloc now represents 35.6% of global GDP and 45% of the world’s population. Despite internal differences, BRICS+ provides an alternative to the Western-led global system with which Russia and China aim to undermine U.S. dominance in international finance, weakening the dollar’s influence and creating alternatives to Western-controlled institutions like the International Monetary Fund (IMF). Meanwhile, Russia’s involvement in BRICS+ has grown in importance after sanctions due to its invasion of Ukraine, and China has led the push for the bloc’s expansion, with both countries sharing the goal of promoting a multipolar world in which the U.S. does not simply dictate a “rules-based international order” du jour. Yet pro-Western sympathies of Brazil and India create tensions in the bloc—though one may interpret the pact India announced with China just two days ago to resolve their border conflict as a commitment to solidarity with its BRICS+ colleagues. Gabuev and Stuenkel therefore urged the West to take BRICS+ seriously, addressing the grievances of its member-nations and improving global governance (“Boo!”) to prevent the bloc from turning into a fully anti-Western force.
They also note how the original BRICS established the New Development Bank (NDB) in 2014 to complement existing global financial institutions like the World Bank and IMF, and to provide a financial safety net for its members. However, U.S. sanctions on Russia since the 2014 annexation of Crimea and the 2022 invasion of Ukraine have disrupted even Russia’s access to NDB funding, highlighting the need for BRICS+ to evolve further to reduce vulnerability to Western financial control.
Still, Gabuev and Stuenkel make no mention of any BRICS+ currency: but, as I suspect happens often, reporters for financial news seem to have sniffed it out sooner than those for international politics, with Kitco News covering the summit three days before that article from Foreign Affairs.
(In fact, Michelle Makori’s interview here with Jon Forrest Little suddenly brought the summit back to my attention—I must have been too distracted writing our recent dispatch and bulletin on political philosophy to give current events much concern.)
Little and Makori first provide (at ~4:53) the historical context that global monetary resets have occurred every 150-200 years as economic powers shift. The U.S. dollar has been the leading reserve currency for only around 80 years since the 1944 Bretton Woods agreement. Previous monetary systems, from ancient Athens to Rome and the Byzantine Empire, saw the purity of their currencies decline over time due to excessive spending, wars, and mismanagement, leading to their eventual replacement. Though the U.S. dollar has managed to remain the global reserve currency even after losing its gold backing with the collapse of the Bretton Woods agreement, its status as the global reserve currency is now being challenged as countries move away from it, Little tells us (at ~12:02), by formalizing trade agreements using their own currencies instead of dollars. Simultaneously, central banks have been reducing their share of dollar reserves, which has fallen to just over 58% according to the IMF, the lowest level in 25 years. At the same time, central banks have been accumulating gold reserves at record levels, while China, Russia, and other countries have been selling U.S. Treasury securities and diversifying away from dollar-denominated assets—all of which signal international preparations for a potential monetary reset.
Naturally, Little discusses (at ~19:40) various formulas and estimates for potential gold prices under a new monetary system backed by gold. Jim Rickards’ formula suggests gold could reach $27,000 per ounce if 40% of the money supply is backed by gold, or over $53,000 if fully backed. Other estimates mentioned include $3,200 for gold and $36/oz for silver in the near term (by Q1 2025). These prices would depend on the backing ratio and the amount of gold held by central banks.
Notably, Little refers not just to the UNIT but also (at ~35:44) to Project mBridge—the cross-border blockchain-based inter-CBDC project led facilitated by the Bank for International Settlements (BIS) that we covered in our mid-year dispatch—which would facilitate UNIT-denominated transactions between BRICS+’s growing number of member-nations. However, Little cautions that as the bloc expands, it may become harder to reach agreements on a common currency and values among diverse countries with (potentially) competing interests. Meanwhile, Little expects the U.S. to resist de-dollarization efforts, with former President Trump suggesting (in a clip provided at ~45:31) tariffs on countries abandoning the dollar. Nonetheless, he notes (at ~50:44) that seeing more U.S. states recognizing gold as legal tender alongside efforts to normalize gold ownership may constitute a sign that the U.S. could eventually be forced to adopt a gold-backed currency system to remain competitive in international trade. He forecasts the first cracks in the current monetary system to begin appearing around Q1 2025, with potential commercial real estate failures and bank bailouts—though, of course, the transition to a multipolar world order could take longer as the process unfolds.
While we’ll of course need to wait to see the accuracy of Little’s forecast, we didn’t need to wait long to learn more about BRICS+’s digital payments infrastructure. As Global Times reported on 17 October, with CCN.com adding further details the next day, the BRICS Business Forum in Moscow has officially launched BRICS Pay, a global payment system designed to streamline financial transactions among member-nations, ahead of the 2024 BRICS+ summit.
The system, which can utilize digital currencies—such as the hypothesized UNIT or stablecoins representing national currencies—aims to reduce reliance on Western financial institutions and promote financial sovereignty. Using blockchain technology and smart contracts, BRICS Pay facilitates cross-border transactions by minimizing intermediaries and reducing transaction costs and ensures interoperability between different national payment systems while complying with each country’s regulations. The BRICS Pay Consortium, operating as a DAO, oversees the project’s implementation. At the forum, attendees tested the system using demo cards preloaded with 500 rubles to make purchases, marking a significant step towards the BRICS+ nations’ goal of de-dollarization and financial independence.
Taken all together, the BRICS Pay system leverages advanced technologies to enable faster, cheaper, and more secure cross-border transactions, free from external interference. Experts highlight its role in de-dollarization, a growing trend driven by U.S. financial sanctions, and in promoting economic collaboration among BRICS+ nations. The initiative is part of broader efforts to create an alternative to Western-dominated financial institutions, such as the IMF and SWIFT. As BRICS+ continues expanding, the payment system represents a key step in building a more inclusive and balanced global financial structure better aligned with projects like China’s Belt and Road Initiative, further enhancing trade and investment opportunities among developing countries.
Of course, the geopolitical importance of changes to the global monetary system didn’t escape the attention of everyone who reports on international relations: earlier this month, Einar Tangen and John Pang discussed it on Neutrality Studies with host Pascal Lottaz.
Naturally, their discussion revolves around the potential role of BRICS+ as a counterweight to the U.S.-dominated global financial system and a platform for developing countries to gain more economic autonomy while reducing their vulnerability to Federal Reserve policies that have caused economic instability and disadvantaged them.
Interestingly for us, their conversation also explores how BRICS+ could serve as a forum for coordinating policies related to pricing strategic resources like oil, gas, and commodities, allowing member countries to capture more value from their exports. Such practices could help mitigate boom-and-bust cycles in commodity markets by leveraging technology and data sharing among members. This could stabilize prices, prevent capital dislocation, and provide more predictability for businesses, especially small and medium-sized enterprises. Even more importantly, however, such efforts could support efforts to de-financialize the global economy and refocus on real production, with finance playing a supportive role—in stark contrast to the Western financial system’s excessive leverage and speculation. Recalling our August dispatch’s critical treatment of the finance, insurance, and real estate (FIRE) sector, that sounds like a welcome change.
On subjects besides economics, the trio celebrates the inclusion of Association of Southeast Asian Nations (ASEAN) countries like Malaysia in BRICS+ as a positive step towards consolidating regional blocs and reducing the narrative of BRICS+ being dominated by China. But other commentators seem less concerned with reducing it: among them, Alexander Dugin, who appeared with journalist Pepe Escobar on New Rules Geopolitics just a few days ago to discuss the BRICS+ summit with host Dmitri Simes Jr. Here, Dugin makes it clear (at ~2:16) that he sees Russia and China leading BRICS+ and the world toward a multipolar world order as a genuine alternative to Western hegemony. For him, BRICS+ goes beyond economics and represents a civilizational challenge to Western modernity, capitalism, and liberalism.
Escobar, however, doesn’t let us forget economics for too long, discussing (at ~7:42) the efforts towards de-dollarization and the creation of alternative financial systems that operate independently of Western institutions like the IMF and the BIS. While he acknowledges the complexity of building a monetary system and the challenges in convincing governments, companies, and the public to adopt new economic models, Escobar notes recent progress in BRICS+ countries trading in their own currencies and the potential for a new reserve currency, along with its importance to a reformed NDB, which is currently constrained by its reliance on the U.S. dollar.
All of that said, their conversation doesn’t stray too far from geopolitics. In the Middle East, with Israel’s ongoing genocide in Palestine, which both Dugin and Escobar describe (at ~28:04) as a clash between the Western unipolar vision, represented by Israel and the U.S., and the multipolar vision of BRICS+. For Escobar, the inability of the United Nations Security Council to condemn the genocide in Gaza illustrates the imbalance and inequality that the post-World War II international system produces. Countries will need to choose a side, it seems: however, he tells us that India remains undecided about its role in this new order, torn between aligning with Western powers or embracing Eurasian integration, while Saudi Arabia’s young ruler hopes to balance Western projects like the IMEC Connectivity Corridor against public opinion at home, with Saudi leadership now hesitant to proceed without resolving the Palestinian issue.
Focusing (at ~37:12) on Turkey’s decision to apply for BRICS+ membership—a significant move as the first NATO country to do so—Escobar and Dugin analyze Erdoğan’s motivations, including his desire to expand Turkey’s influence in Eurasia and the Turkic world, as well as his disillusionment with the West and NATO. They see Turkey’s pivot as a symbolic victory for multipolarity and respect for civilizational diversity, and a potential catalyst for further erosion of Western hegemony.
The guests also highlight (at ~44:55) the growing interest from African countries in joining or cooperating with BRICS+ as a manifestation of Africa’s desire for decolonization. They discuss the potential for Africa to become a significant pole in the multipolar world order, in which countries like Nigeria and Angola could play a crucial role.
The 2024 BRICS+ summit in Kazan stands as a pivotal moment in the evolution of global finance and geopolitics. As BRICS+ members explore the potential of a shared currency like the proposed UNIT, they aim to create an economic framework that challenges U.S. dollar dominance and promotes financial sovereignty. The discussions on de-dollarization and the implementation of BRICS Pay signal a decisive push towards a multipolar world where Western financial hegemony may no longer dictate the global order.
Eagle-eyed readers with unimpeachable memories will have surely noted that the proposed UNIT bears a striking resemblance to a digital currency issued by the Digital Currency Monetary Authority (DCMA) called the “Unicoin” (UMU) mentioned in one of our May bulletins. Surely the similarities between the UNIT and the Unicoin’s semi-decentralized digital currency network—developed by DCMA’s subsidiary Universal Monetary Unit and designed for regulated entities like governments, banks, and licensed fintech companies—won’t have been lost on Martin Armstrong, the paleoconservative economic forecaster we cited in that bulletin, in another from the following month, and in our August dispatch.
In the latter of those two bulletins, we note Armstrong forecasting an imminent World War III. The economist recently spoke again about it last month in an interview with Financial Sense, arguing that governments often use the excuse of war to default on debts and implement new systems of control. Here. he tells us (at ~50:43):
Because of the BRICS, the IMF has already created their digital currency. This may not be widely known, but what the scheme is, with the whole thing of war, they know that you cannot cover those debts. So, they will use the war as the excuse: “We will form a new government, default on those debts, etc.” […] All right, so you’re looking at [what] the IMF is proposing. They can step in and become the peacemaker. And because they become the peacemaker, that elevates the United Nations to this one-world government […] and then the IMF comes out with its digital currency. Everybody clears through this, not the dollar anymore. The dollar is no longer the reserve currency. And then they bring back the BRICS and the SWIFT system all together with the IMF. This is what they plan.
(We could add too that maybe discussing such a plan is on the agenda for President Putin’s meeting with UN Secretary-General Antonio Guterres scheduled for the summit’s final day.)
Armstrong naturally criticizes such an endeavor, drawing a parallel between this plan and the creation of the European Union, which was intended to prevent war through centralization, but argues that such efforts fail because centralized governments tend to spark civil wars. Citing Ancient Rome’s success in maintaining stability by allowing provinces to preserve their own cultures and customs, he contrasts that strategy against modern efforts to impose uniform policies across diverse regions (such as in the U.S. or Europe) lead to conflict. Accordingly, Armstrong suggests that respecting local differences, whether cultural or political, is key to preventing societal collapse, warning that centralization and forced uniformity increase the risk of civil unrest and societal failure.
In that case, BRICS+ indeed seems to offer an alternative to the hypothesized one-world government, though the authenticity of that offer—whether, that is, the bloc can deliver on its promise—will depend on how the world’s nations restructure the global monetary system in the aftermath of WWIII.
Before that, though, internal differences—particularly between pro-Western and anti-Western members—may complicate the path forward for the BRICS+ bloc, even as it continues to expand and grow in influence. Nevertheless, the summit underscores the bloc’s ambitions to reshape the international monetary system, reduce dependence on Western institutions, and foster greater economic autonomy for its member nations: as Watcher.Guru reports just today, representatives from 40 countries including those from the Commonwealth of Independent States (CIS), Asia, Africa, Eastern Europe, South America, and the Middle East, will attend an outreach session tomorrow at the summit to discuss alternatives to the U.S. dollar, new trade policies, and the use of local currencies—particularly in loans from the NDB.
As the global balance of power continues to shift, the developments in Kazan could mark the beginning of a new era in international finance, with BRICS+ playing a crucial role in shaping the future. Surely the journey will be complex and gradual, but the potential implications for the global economy are immense, particularly as the bloc gains momentum and further consolidates its economic, political, and technological initiatives. While we may not see an immediate transformation, the groundwork is being laid for a future where BRICS+ stands as a formidable force in the world order.
Premise seems more likely than many I've heard.