V. Putin calls for a “Decentralized Financial System”

Vladimir Putin expressed his support for a “decentralized” financial system at the Eurasian Economic Union Forum held in Moscow.

Is Putin giving a nod to Bitcoin?

The Russian president continues to defy the international order. The leader asserts that “More and more states are taking a course towards strengthening national sovereignty, pursuing an independent domestic and foreign policy, and adhering to their own development model.”

“And these are not empty words,” he declared, highlighting Russia’s close relationships with major international associations such as BRICS, the Shanghai Cooperation Organization, ASEAN, the Gulf Cooperation Council, as well as multilateral organizations in Latin America and Africa.

Putin particularly praised the developments in the international monetary system:

“Many fast-developing economies, including China, India, and the Latin American countries, are switching to national currencies in their foreign trade settlements. It is important to coordinate our efforts to create a new and decentralized global financial system. Of course, the stability of global finance will largely depend on how this decentralization goes. The more decentralized the system, the better it will be for the global economy, since it will be less dependent on crises in the countries that still enjoy an advantage in the form of world reserve currencies. This will boost the security of not only transaction settlements, but the entire global economy as well, and will remove politics from the economic sphere.”

This is the first time the Russian president has used the word “decentralized” to describe his ideal monetary system. Is he giving a nod to Bitcoin? After all, no other global payment system besides Bitcoin is decentralized…

That being said, the Russian president was likely referring to the simple fact of not having a monetary system centered around the dollar.

What about China and Bitcoin?

The stateless Bitcoin is designed to serve as an international reserve currency and a payment system (two-in-one) for two main reasons:

• No nation can censor Bitcoin transactions, unlike the SWIFT, Visa, or CIPS (China) networks.
• No central bank can create more than 21 million BTC. In contrast, the monetary supply of the dollar follows an exponential trajectory.

However, the leaders of the Chinese Communist Party seem less interested as they are exploring things like the CBDC and social credit. Bitcoin also allows bypassing capital controls implemented by Beijing.

But China will have to open up eventually. Moreover, China has the great advantage of owning all the major ASIC manufacturers (Bitmain, MicroBT, Canaan, etc.). Will the Middle Kingdom backtrack?

Attending the Eurasian Economic Forum via video link, Xi Jinping reiterated that “the world today is undergoing profound changes unseen in a century” He stated, “the historical trend toward multipolarity and economic globalization is irresistible.”

In other words, dedollarization is inevitable. Indeed, not a week goes by without two countries announcing trade in their own currencies. Just this week, Iran and Indonesia have taken the plunge.

“We believe that sanctions and threats cannot stop us in any way,” said the Iranian president from Jakarta.

Keep a close eye on the BRICS summit in August. Not only because around twenty countries are vying for participation.

But also because there are whispers that a new international reserve currency (or currencies) will be proposed. Refer to this article to understand why an international reserve currency is so important.