The heads of state and government of the BRICS countries are currently meeting in Kazan, Russia. From a political point of view, it may appear to be a gathering of those who represent the counter-model to the open, liberal constitutional states of the West, Commerzbank’s Head of FX and Commodity Research Ulrich Leuchtmann notes.
BRICS currently has no edge against the USD
“USD transactions that violate US sanctions have not been possible, regardless of the jurisdiction of the parties involved in the transaction. This is because US financial institutions are always involved. And even when transactions are in other currencies, the US sanctions also apply outside the US. Because companies and banks worldwide have to fear being hit with ‘secondary sanctions’ by the US authorities if they deal with trading partners who are on US sanctions lists.”
“As long as transactions that do not have to be carried out via such a system (because they fear US sanctions or are forced to use it in their domestic jurisdiction) are not carried out via such a system, such a system may fragment world trade, but it will not endanger the status quo on a global scale.”
“If the US were to pursue a policy of sanctions that a significant portion of Western industrialized nations did not accept, they could agree with the BRICS to establish a payment system independent of US access and not to accept the extraterritorial encroachments of US sanctions policy. If the BRICS and the Western states (excluding the US) were to agree, the critical mass would certainly be reached.”
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