Russian President Vladimir Putin has called for a transition to a decentralized international financial system, asserting that such a transformation would bolster global economic resilience. This revolutionary viewpoint was expressed at the second Eurasian Economic Forum and has triggered a renewed debate on the future of global financial frameworks.
Rethinking financial systems for stability
President Putin proposed that a decentralized financial system could better serve the global economy and improve stability. He suggested that the economy would become “less dependent on crisis phenomena” in countries that hold global reserve currencies, making payments more secure.
According to Putin, decentralization would depend heavily on the “advantage of global reserve currencies.” In his perspective, a more diversified financial system might reduce the world’s vulnerability to fiscal turbulence in nations with prominent reserve currencies. The President also highlighted the role of such a system in a depoliticized global economic environment, contributing to withstand crises sparked by significant events.
Putin also emphasized that the financial overhaul could enhance the security of payments and the whole global economy, suggesting the development of a de-politicized economic landscape.
Shifting toward national currencies
The Russian leader’s vision of a more equitable financial landscape does not exist in a vacuum. Putin pointed out that several rapidly advancing economies, including China, India, and countries in Latin America, are increasingly moving towards using national currencies for international trade settlements.
Putin’s emphasis on using national currencies corresponds with Russia’s current economic strategy, which seeks to reduce reliance on the currencies of countries deemed unfriendly. This approach supports the notion of increased national sovereignty and the pursuit of independent domestic and foreign policies, intending to construct a new, more equitable global system of economic relations.
In this context, the Kremlin has been endeavoring to reduce the share of the U.S. dollar used for its international settlements due to U.S. sanctions, opting for the Chinese yuan and other national currencies in transactions with China and Iran.
This discourse around financial decentralization resonates with the theme of this year’s forum, “Eurasian integration in a multipolar world,” underscoring Putin’s belief that the world is undergoing “fundamental changes.”