In his opening remarks, Xi stated, “We should also expand BRICS cooperation on cross-border payment and credit rating to facilitate trade, investment, and financing among our countries.”

According to the Chinese state-run tabloid Global Times, bankers and economists in BRICS countries have recommended that the bloc “expand national currency settlements and lending to counter the US’ weaponization of the dollar.”

Xi, Putin, and the bankers from VEB.RF have three basic complaints regarding currency. They resent the dominance of the U.S. dollar as a reserve currency. They do not want the dollar to be the currency of international settlement. And they are threatened by the necessity to transact international payments through the U.S. SWIFT system, which depends on U.S. banks.

The reason why countries use the U.S. dollar in the international settlement is because commodities such as oil are priced in dollars, and because the dollar is a stable currency that is readily convertible everywhere in the world. None of the BRICS currencies are considered fully convertible.

Even if a Chinese or Russian payment system is agreed upon, there would still be the problem of which currency to use for international trade.

Arguably, the Chinese yuan would be the most logical currency for the BRICS nations to use for internal trade. Currently, the Chinese Cross-Border Interbank Payment System (CIPS) is set up to handle trade in yuan. But by agreeing to conduct business in yuan and through the CIPS, the other BRICS nations would be ceding U.S. control of their cross-border trade for CCP control

An alternative recommendation by Putin and bankers in Russia would be to use a basket of currencies. This idea is modeled on the IMF’s SDR, which is composed of a basket of international currencies, including the U.S. dollar, euro, yuan, Japanese yen, and British pound.