- Russian President Vladimir Putin is hosting the BRICS summit in Kazan, Russia.
- Putin is touting trade in local currencies, a move away from the US dollar.
- Despite the de-dollarization push, summit organizers advised participants to bring dollars and euros.
Russian President Vladimir Putin is hosting a major summit with more than 20 world leaders, who he is trying to convince to ditch the dollar.
De-dollarization is one of Putin’s priorities because trading in local currencies means that a heavily sanctioned Russia will not be subordinated to the world financial order dominated by the US dollar.
But it’s not easy to get away from the greenback. Organizers of the BRICS summit have advised foreign attendees to bring cash – particularly dollars and euros – to the event in the Russian city of Kazan.
Most Russian banks will only take US dollars or euros – which Moscow has deemed “toxic currencies” – to exchange for rubles, according to a guide on the summit’s website.
Going cashless is not an option, as it is not possible to use Mastercard or Visa cards issued outside of Russia in the country. The two card issuers halted local operations days after Russia invaded Ukraine in 2022.
China’s Union Pay cards can be used – “but with restrictions”, according to the guide.
Participants can apply for Russia’s Mir payment card – and there is a bank at Kazan International Airport to get a card, exchange currency and withdraw money.
These payments issues not only undermine the plausibility of the BRICS group’s call to de-dollarize, but also underline the enormous challenge the BRICS would have to topple King Dollar, which is firmly embedded in the global financial order.
The group of developing nations anchored by Brazil, Russia, India, China and South Africa is not giving up.
On Tuesday, Putin again promoted the use of local currencies on the sidelines of the first day of the summit.
“Increasing payments in local currencies makes it possible to reduce the debt service fee, increase the financial independence of BRICS member countries, as well as mitigate geopolitical risks to the greatest extent possible and, as much as possible in the present world, stand apart. economic development from politics,” Putin said Tuesday in a meeting with Dilma Rousseff, president of the BRICS New Development Bank, according to Russian news agency TASS.
Putin closes a social year with the BRICS summit
Putin is also courting Chinese leader Xi Jinping, Indian Prime Minister Narendra Modi, South Africa’s president and the UN secretary-general at this week’s summit. Brazilian President Luiz Inácio Lula da Silva canceled his trip after a fall at home.
The BRICS summit is bigger this year because the Western-weary group has welcomed new members Egypt, Ethiopia, Iran and the United Arab Emirates over the past year. Saudi Arabia has been invited but has not officially joined the club.
Russia is the BRICS chair this year, so a bigger summit is a feather in the cap for Putin, who has had a busy social calendar this year, even as Russia and the Russian leader himself have been heavily sanctioned.
Ahead of the BRICS summit, Putin was already traveling the world and mingling with senior leaders from Asian countries, including china, India, Vietnam, AND Indonesia.
Despite BRICS’ interest in reshaping the world order, the group is riddled with rivalries and competing interests that it must first overcome, analysts told Business Insider.
“Behind the rhetoric, there is great concern — even within Russia — whether the new members will become their equals,” Evgeny Roshchin, a visiting scholar at Johns Hopkins University’s Henry A. Kissinger Center for Global Affairs, said in a press conference held by the Center for European Policy Analysis on Monday.