Siluanov stated the need for BRICS to have an independent trade settlement system “outside of politics”

By Rhod Mackenzie

According to Anton Siluanov, the Russian Minister of Finance , the BRICS countries should establish a self-sufficient foreign trade settlement system that is both cost-effective,functional and independent of political factors.

. Siluanov suggests re-evaluating the international monetary and financial system. It is evident that there are several issues with the politicisation of the monetary and financial system. International financial institutions, such as the IMF and the World Bank, often base their decisions on political rather than economic considerations. According to Siluanov, reserve currencies are no longer used to facilitate trade turnover, but rather as a political tool. He also noted that settlement organizations like Euroclear and Clearstream have become political tools and are not independent. Siluanov made these comments to Bloomberg TV while attending a meeting of finance ministers and central bank governors from BRICS countries in Brazil.

Therefore, for the BRICS countries to further develop its intra country trade it is necessary to create independent financial systems and ensure trade relations between them. Trade among the BRICS countries is increasing, and Russia is redirecting flows from West to East. However, a functional trade payment system and transfers are required for these flows to work effectively, as the minister noted.

According to him, Russia, which chairs BRICS, will propose the creation of an independent settlement payment system based on new digital and blockchain principles. This system would be cost-effective for making payments and would be free from political influence. The discussion of this proposal will take place today.

Frozen assets.
When asked about US Treasury Secretary Janet Yellen's suggestion to use frozen Russian assets to support Ukraine, Siluanov commented that he had heard this proposal before and believed it to be fundamentally erroneous and destructive.

He asked, 'Why?' Restricting the gold and foreign exchange reserves of national banks can undermine the foundations of the financial system. Any political restrictions or freezes on these reserves can have negative consequences. Therefore, if our Western colleagues take this step, they will only make things worse for themselves. This has been demonstrated by previous restrictions on settlements in dollars and in our clearing, settlement, and logistics systems. We will find a way out of this situation. However, these decisions undermine the foundations of the global financial system, which have been taking shape for years.

How should we respond? We have a responsibility to act, as we have frozen significant volumes of financial assets, including investments made by foreign investors in our securities, both corporate and government. We must continue to honour our commitments to foreign owners of our securities. However, our current decisions are misguided, as we need to focus on finding solutions to the problems we face, rather than escalating them. The Russian minister concluded, 'If our colleagues act in this manner, we will respond symmetrically.'