Several leading analysts point out that a new international monetary system, called Unit, is likely to be unveiled as early as the BRICS summit in Kazan in October.
Since World War II, the US dollar has dominated international trade as the reserve currency, an era that could come to a definitive end as early as next year.
Pepe Escobar, a Brazilian geopolitical analyst who follows BRICS developments, points out that the so-called unit system has already gained support in the BRICS Business Council and is clearly included in the planning for the BRICS summit in Kazan, the capital of the Russian state of Tatarstan, in October.
Sanctions accelerate developments
Discussions on a new international monetary system have been underway within BRICS for some time, but are generally considered to have accelerated as a result of Western bloc sanctions against Russia, especially after the EU seized Russian currency and gold reserves abroad, then valued at more than $600 billion, which it sought to transfer to Ukraine.
Russia’s shift in energy trade, where it now sells large quantities of its oil to India, has also created a significant trade imbalance between the two countries, with Russia running a large surplus of Indian rupees. The trade relationship with fellow BRICS country Iran has also been a contributing factor, Escobar points out.
“Russian trade with Iran is unprofitable due to sanctions – neither side can make payments in dollars or euros”, Escobar explained in an article for Sputnik International.
“Immune to political pressure”
Unit is based on a model developed by Russian economists Alexei Subbotin and Vasily Zhabykin and Chinese economist Ji Luo, who published an initial overview of Unit in a white paper in May. The organization formally behind the project is described as IRIAS, a UN-certified intergovernmental research organization originally founded in 1976 as a cooperative organization among former Eastern Bloc countries.
Among other things, the currency system is described as having been developed and adapted using blockchain technology to be “apolitical,” in the sense that it enables international payments and trade exchanges while ensuring that no individual member can use the system to exert political pressure on another.
“Unit should be seen as a feasible, technical solution for the theoretically Unsolvable: a globally-recognized payment/trade system, immune to political pressure.”, explains Pepe Escobar.
Broadly speaking, the unit would be backed up to 40% by gold and partly by the national currencies of the BRICS countries. The system is described as “fractal” and will eventually be scalable beyond government actors to the private sector.
“The endgame is that everyone, essentially, may use the Unit for accounting, bookkeeping, pricing, settling, paying, saving and investing”, Escobar continues.
