Putin Believes Decentralization Will Help Global Economy Be More Resilient

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Updated: 26 May 2023

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Vladimir Putin, the Russian president, came out in support of decentralization during the second Eurasian Economic Forum, which was held in Moscow. In a statement, he expressed that this move would help the Russian economy be more resilient. Putin explained that developing this decentralized system would allow for a depoliticized global economic arena, which would help to withstand crises caused by significant events.

Decentralized Finance System to Benefit Global Economy

During the second Eurasian Economic Forum, held in Moscow on Wednesday, Russian President Putin expressed his enthusiasm for allowing decentralization, which he describes as a move that would help strengthen the global economy.

In his statement, Putin said:

“It is important to coordinate joint efforts on the formation of such a new decentralized global financial system. Of course, the stability of all global finances will largely depend on this decentralization. The more decentralized it is, the better for the global economy. It will be less dependent on crisis developments in the countries that still have such an advantage as global reserve currencies,”

Putin on the matter decentralization further stated:

“Of course, the stability of all global finances will largely depend on this decentralization. The more decentralized it is, the better for the global economy. It will be less dependent on crisis developments in the countries that still have such an advantage as global reserve currencies.”

Russia and China Working on Cutting Edge Payment System

The Russian government has started de-dollarization, a move that will make the use of U.S. dollars quite impossible as a mode of payment. This move has seen billions of U.S. dollars frozen and the birth of the BRICS.

Putin noted that this will increase the security of not only payments but the entire global economy and depoliticize economic work.

Moreover, during the BRICS business forum last year, Putin hinted about the possibility of issuing a common currency for the BRICS bloc of countries in hopes that this would help in this decentralization direction, allowing for the future development of alternative payment methods other than the US dollar and establishing traditional payment channel controls.

Russia Under BRICS New Payment System

Brazil, Russia, India, China, and South Africa have joined forces under an umbrella called the BRICs to ensure financial independence and decrease the circulation of the dollar. Putin is advocating for decentralization, and there has to be a payment method that supports this move and, therefore, the birth of BRICS.

As a result, Russia intends to build an alternative financial system that will allow it to conduct transactions with other countries without relying on SWIFT, the global banking network, or the US dollar. The G7’s intention to further restrict Russia’s access to the existing financial system drives this pursuit.

Moreover, Russia’s national economic development institution’s chairman, Igor Shuvalov, has urged the country to make it hard to develop a payment system that supports transactions in the Russian ruble, the Chinese yuan, and the currencies of SCO and BRICS member countries.