BRICS Economy: Russia Unveils New Crypto Exchanges and The Unit may be a Stablecoin

We have an update on a BRICS currency.  This has been in the works with an announcement from the Russian Central Bank some weeks ago.  First the report and then some comments.

—

Russia Unveils New Crypto Exchanges and Mulls BRICS Stablecoin to Facilitate BRICS Trade

In a major move to counteract economic sanctions, Russia is launching two new crypto exchanges in Moscow and St. Petersburg, designed specifically for international (BRICS) trade. This marks a significant shift in the global economic landscape, as Russia seeks to create alternative trade channels amidst growing geopolitical tensions.

Key Highlights:

Strategic Locations: These exchanges are situated in Moscow and St. Petersburg, Russia’s major economic nodes, positioning them as critical gateways for BRICS trade.

Target Audience: Initially, access will be limited to large companies, particularly exporters and importers, emphasizing Russia’s focus on facilitating substantial trade operations.

Stablecoins Linked to Yuan & BRICS: To support these exchanges, Russia plans to issue stablecoins tied to the Chinese Yuan and a BRICS currency basket. This move aims to decrease reliance on the US Dollar and strengthen economic ties within the BRICS nations.

Adapting to Sanctions: This development is part of Russia’s broader strategy to adapt to economic sanctions, utilizing cryptocurrency as a tool to sustain and expand its global trade network.

A Step Towards Financial Sovereignty: With the introduction of these exchanges and stablecoins, Russia is not just responding to sanctions—it’s actively shaping the future of global trade, reducing the dominance of the US Dollar in international transactions.

Comments:

In the big scheme of things, this could be a very elegant solution to at least establish what we called “The Unit” up to now.  It will solve a very large problem and at least give a ‘trading number’.

Example:  Country B will buy stablecoins from the Russian Bourse and use that to pay for their trade transaction with Country C.

The lil’ red man with the horns and fork though, is clearly to be found in the details here.  The basket of currencies need to be transparent.  How is that calculated?  Who calculates that?  Would it be a BRICS economic group?  Does it cater for inflation as crypto transactions by definition (and I won’t explain this now) gather inflation.  How is it handled if a country is deeply indebted?  Will the ‘fix’ be in?

It does seem to be the killer of sanctions as The Unit can flow without using any of the current mechanisms, for example SWIFT.

The technical design is crucial here.  We’ve heard from Nabiulina some weeks ago that they have built this and if they are ready to open their Bourses, there must already be a product ready to roll.  If this is accurate, the value of “The Unit”, the stablecoin must already have been defined.

On the face of it, it solves the problem of debt to the IMF and World Bank.  BUT, if I learned from Michael Hudson, the next step would be for indebted country to use or at least attempt to use “The Unit” to pay their debts.  How many of “The Unit” is planned for release?  If one wants to play with cryptos, there has to be a limited number.  This is simple economics of demand and supply.

So, let’s look at it as if the value of “The Unit” is cut and dried.  I buy from a country a large amount of fruit to supply to my country.   For the purchase transaction, I buy Units from the Russian Bourse and pay for my fruit.  I have fruit, the seller has Units.  Can a shipper be paid with Units/Stablecoins?.  What does the seller do with the units?  Is it a closed loop?  This is a simple buy/sell transaction and it gets more complex from here on.

The Unit will of course be able to be part of a country’s balance of payments and act as a savings or asset.  This is, only if it is respected and it is profitable to hold these.

Comments will be appreciated.  I think it is workable on the face of it.  As the report states, it is only for the big players.  What if I want to purchase something from Alibaba for example?