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The Global South: new payment system

The Global South births a new game-changing payment system

By Pepe Escobar and first posted at The Cradle

The Eurasia Economic Union (EAEU) is speeding up its design of a common payment system, which has been closely discussed for nearly a year with the Chinese under the stewardship of Sergei Glazyev, the EAEU’s minister in charge of Integration and Macro-economy.

Through its regulatory body, the Eurasian Economic Commission (EEC), the EAEU has just extended a very serious proposal to the BRICS nations (Brazil, Russia, India, China and South Africa) which, crucially, are already on the way to turning into BRICS+: a sort of G20 of the Global South.

The system will include a single payment card – in direct competition with Visa and Mastercard – merging the already existing Russian MIR, China’s UnionPay, India’s RuPay, Brazil’s Elo, and others.

That will represent a direct challenge to the western-designed (and enforced) monetary system, head on. And it comes on the heels of BRICS members already transacting their bilateral trade in local currencies, and bypassing the US dollar.

This EAEU-BRICS union was long in the making – and will now also move toward prefiguring a further geoeconomic merger with the member nations of the Shanghai Cooperation Organization (SCO).

The EAEU was established in 2015 as a customs union of Russia, Kazakhstan and Belarus, joined a year later by Armenia and Kyrgyzstan. Vietnam is already an EAEU free trade partner, and recently enshrined SCO member Iran is also clinching a deal.

The EAEU is designed to implement free movement of goods, services, capital, and workers between member countries. Ukraine would have been an EAEU member if not for the Maidan coup in 2014 masterminded by the Barack Obama administration.

Vladimir Kovalyov, adviser to the chairman of the EEC, summed it all up to Russian newspaper Izvestia. The focus is to establish a joint financial market, and the priority is to develop a common “exchange space:” “We’ve made substantial progress and now the work is focused on such sectors as banking, insurance, and the stock market.”

A new regulatory body for the proposed joint EEU-BRICS financial system will soon be established.

Meanwhile, trade and economic cooperation between the EAEU and BRICS have increased 1.5 times in the first half of 2022 alone.

The BRICS share in the total external trade turnover of the EAEU has reached 30 percent, Kovalyov revealed at the BRICS International Business Forum this past Monday in Moscow:

“It is advisable to combine the potentials of the BRICS and EAEU macro-financial development institutions, in particular the BRICS New Development Bank, the Asian Infrastructure Investment Bank (AIIB), as well as national development institutions. This will make it possible to achieve a synergistic effect and ensure synchronous investments in sustainable infrastructure, innovative production, and renewable energy sources.”

Here we once again see the advancing convergence of not only BRICS and EAEU but also the financial institutions deeply involved in projects under the China-led New Silk Roads, or Belt and Road Initiative (BRI).

Halting the Age of Plunder

As if all that was not game-changing enough, Russian President Vladimir Putin is raising the stakes by calling for a new international payment system based on blockchain and digital currencies.

The project for such a system was recently presented at the 1st Eurasian Economic Forum in Bishkek.

At the forum, the EAEU approved a draft agreement on cross-border placement and circulation of securities in member states, and amended technical regulations.

The next big step is to organize the agenda of a crucial meeting of the Supreme Eurasian Economic Council on 14 December in Moscow. Putin will be there – in person. And there’s nothing he would love more than to make a game-changing announcement.

All of these moves acquire even more importance as they connect to fast increasing, interlocking trade between Russia, China, India, and Iran: from Russia’s drive to build new pipelines serving its Chinese market – to Russia, Kazakhstan, and Uzbekistan discussing a gas union for both domestic supplies and exports, especially to main client China.

Slowly but surely, what is emerging is the Big Picture of an irretrievably fractured world featuring a dual trade/circulation system: one will be revolving around the remnants of the dollar system, the other is being built centered on the association of BRICS, EAEU, and SCO.

Pushing further on down the road, the recent pathetic metaphor coined by a tawdry Eurocrat boss: the “jungle” is breaking away from the “garden” with a vengeance. May the fracture persist, as a new international payment system – and then a new currency – will aim to halt for good the western-centric Age of Plunder.

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amarynth
Admin
2 months ago

Pepe is very bullish and his enthusiasm really affects me! BUT, there is a big thing that I do not hear anyone talking about. I am read in on some of Michael Hudson’s work and his China grouping and the question from Michael is always .. Yeah! who is going… Read more »

emersonreturn
emersonreturn
2 months ago
Reply to  amarynth

again, thank you amarynth, for this delectable site & your daily feast, you & your hard work are deeply appreciated. certainly i know nothing about debt, so i’m hoping others will respond with full answers, ways & means. ahh, if you are near a computer? my question is—in regards to… Read more »

SoUtH
SoUtH
2 months ago
Reply to  emersonreturn

RE: “why can’t those nations most burdened & destroyed by odious horrendous debt simply refuse to repay it?” I believe that it might be because when the loans were made, they were collateralized, as are most loans. If correct, the poor country likely had to agree that ownership of their… Read more »

emersonreturn
emersonreturn
2 months ago
Reply to  SoUtH

thank you, soUth, i was hoping you might reply. & certainly collateral is the hinge empire has for centuries used as both noose & sword. odious certainly entails giving away ones richest mountain or in ukraine’s case, her land…& whether cargill or blackstone ever do manage to seed & work… Read more »

SoUtH
SoUtH
2 months ago
Reply to  emersonreturn

Hi EmRe Re: “perhaps mountain & seashore & pampas will be returned to their nations, a fond hope, yet possible?” Yes. Very possible imo. When Putin wins, he will be in a very powerful position (and especially so when the new global alliances become well entrenched). He will be at… Read more »

emersonreturn
emersonreturn
2 months ago
Reply to  SoUtH

hi soUtH i had replied yesterday unfortunately my answer did not appear. as much as i recall—yes yes, exactly (as elaine may responding to mike nichols in one of their skits) yes, i too recall feeling very like you when the emissay’s name was cited, however, i cannot recall it… Read more »

SoUtH
SoUtH
2 months ago
Reply to  emersonreturn

Actually, the fact that Putin believes that charlie and the red shields were the ones who blew up his pipeline does not portend well for the future of humanity. It shows the level of the “game” and its stakes. The latter want ownership of entire globe and the former says… Read more »

emersonreturn
emersonreturn
2 months ago
Reply to  SoUtH

thank you, soUtH. i began following russia when i was very young. o/c the music & literature spoke to my soul & changed me evermore. when i was thirteen/fourteen i stumbled onto edgar casey & he said russia would be the saviour of the world. i’m 75, that long ago… Read more »

AHH
AHH
2 months ago
Reply to  emersonreturn

Hi Emerson,  I much appreciate your thoughtful and incisive comments. Re: “in regards to debt forgiveness & toxic odious debt forgiveness—why can’t those nations most burdened & destroyed by odious horrendous debt simply refuse to repay it?” In addition to excellent points by South (lawfare: enforceable collateral losses, etc.), a… Read more »

emersonreturn
emersonreturn
2 months ago
Reply to  AHH

thank you, ahh, for your reply. i look forward to learning more about your life changing trip to yemen. in time…may we, through you, also feel our ions altered. & begin to fathom how all these years the yemeni (as well as the palestinians & syrians) have had the will… Read more »

QC?
QC?
2 months ago
Reply to  amarynth

“Tell me, who is going to pay the Dollar Denominated Debt?” dear amarynth I am quite sure Michael Hudson knows the answer… … but he is NOT telling as with many ppl who saw the writings on the wall and can decipher correctly 😛 Let me put it this way… Read more »

SoUtH
SoUtH
2 months ago
Reply to  amarynth

From 1892 until 2001, the currency of El Salvador was the colón.

The US dollar replaced the colón in 2001.

The Government of El Salvador has recently announced that the country is operating two official currencies: the US dollar and Bitcoin. Bitcoin became legal tender in September 2021,

Col...'the farmer from NZ'
Col...'the farmer from NZ'
2 months ago
Reply to  amarynth

I think the development of the BRIICS+++ bloc has such momentum now that very soon they will be able to ALL get together and tell the IMF, WB, and the entire motley collection of thieving private banks that the loans were purposely predatory, cynical, and more often than not simply… Read more »