- 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.