Russian President Vladimir Putin delivered a stark warning about the future of the US dollar-based global financial system. Putin says the USD-based global financial system is collapsing, Putin’s comments reflected growing concerns among some world leaders about the stability and sustainability of the current financial order. Russian President Vladimir Putin has asserted that the global financial system anchored on the U.S. dollar is steadily deteriorating.
Putin underscored the notion that a currency’s strength is closely linked to the economic power of the nation issuing it, stating, “A currency derives its value from the strength of the country’s economy that backs it.” He went on to emphasize that the proportion of the American economy in the world’s Gross Domestic Product (GDP) is diminishing. In contrast, Putin pointed out the growing influence of BRICS nations in terms of purchasing power parity in comparison to the G7 countries.
Putin’s Perspective on the Unraveling of the U.S. Dollar-Centric Financial System
During the plenary session of the 20th-anniversary meeting of the Valdai Discussion Club, Russian President Vladimir Putin expressed the viewpoint that the worldwide financial system reliant on the U.S. dollar is progressively disintegrating. Putin pointed out that he is not alone in holding this perspective, as Western experts also share this assessment. The Russian president further remarked:
“This Bretton Woods system was created on the basis of the dollar, but it is all gradually collapsing. After all, a currency is a derivative of the power of the economy of the country that issues this currency.”
“The portion of the global GDP represented by the American economy is diminishing, and this is a fact supported by statistical data,” he emphasized. In contrast, Putin underscored the rising significance of BRICS nations, particularly after welcoming new members into the organization, in relation to the share of the G7 countries in terms of purchasing power parity. He highlighted, “This holds significant implications, and the disparity is quite substantial.
BRICS Expansion and the Push for Local Currency Use
The BRICS economic alliance has recently expanded its roster to include Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE). At the conclusion of the BRICS summit in August, the leaders of Brazil, Russia, India, China, and South Africa expressed their commitment to “promoting the utilization of domestic currencies in global trade and financial dealings.”
Addressing the prospect of the BRICS group establishing a shared currency, the Russian president offered his perspective: “For BRICS, we now need not to create a single currency, but we need to establish a settlement system, create financial logistics in order to ensure payments between our states, switch to payments in national currencies.”
Putin also disclosed, saying, “Yesterday, we engaged in discussions on this matter with our experts, including the potential for establishing a unified currency within BRICS. In theory, it might be feasible, but to even contemplate such an endeavor, we must first attain a degree of economic parity among our nations. However, this is a considerably distant prospect.”
Putin says the USD-based global financial system is collapsing, and remarks at the Valdai Discussion Club underscore the growing concerns surrounding the stability of the U.S. dollar-centered global financial system. As the share of the American economy in the world’s GDP declines, Putin highlights the increasing prominence of BRICS nations in terms of purchasing power parity. While discussions about a common BRICS currency have arisen, Putin acknowledges that achieving economic parity among member countries is a formidable and long-term challenge. The evolving dynamics in the international financial landscape, including the expansion of BRICS and the pursuit of alternative currencies, suggest that the world is at a pivotal juncture. The future of the global financial system is likely to depend on collaborative efforts to address these concerns and adapt to a changing economic order.
Also Read: Robert Kennedy Jr promises to end constant attacks on Bitcoin from the White House.
