Reports Of BRICS Moving Forward With Gold-backed ‘Unit’ Currency

We’ve been hearing rumblings of the possibility of the BRICS creating an alternative payment currency that may involve gold ever since Russia was kicked out of the SWIFT system in 2022. 

But in May of 2024, journalist Pepe Escobar reported that the BRICS nations are now advancing their plan, which is based on a partially gold-backed settlement currency called the Unit.

The BRICS Business Council has already endorsed the Unit, a proposal that as currently constituted would include a 40% backing of gold and a 60% backing of BRICS+ currencies.

In his report Escobar explains the significance of the development:

"And now comes the clincher: the Unit has already received backing by the BRICS Business Council and is on the agenda at the crucial ministerial meeting in Russia (which occurred in July), which will work out the road map for the summit next October in Kazan. 

That means the Unit has all it takes to be on the table as a serious subject discussed by BRICS+ and eventually be adopted as early as in 2025."

Sergey Glazyev, a prominent member of the Russian Academy of Sciences and Minister of Integration and Macroeconomics for the Eurasian Economic Union (EAEU), has also voiced his support of the Unit model. 

He describes it as an academically sound and technologically innovative solution that complements the existing banking infrastructure. And he emphasized the legitimacy of the Unit under a UN institution, and for its role as a decentralized global trade currency anchored in physical gold and BRICS+ currencies.

"I have been following the development of Unit for more than a year and can confirm that Unit offers a very timely, feasible solution. 

Launching it under the auspices of a UN institution gives Unit legitimacy, which the current Bretton Woods framework is clearly lacking. 

Recent actions by the US administration and loud silence from IMF clearly indicate the need for change. 

A decentralized approach to emission of potential global trade currency, whose intrinsic value is anchored in physical gold and BRICS+ currencies, makes Unit the most promising of several approaches being considered. 

It balances political priorities of all participants, while helping each sovereign economy develop along its optimal path. 

The New Development Bank (NDB) and BRICS+ shall embrace the concept of Unit and help it to become the pinnacle of the new emerging global financial infrastructure, free from malign political interferences while focused instead on fair trade and sustainable economic growth.”

As the plan has developed, Escobar talks about how the emphasis has now shifted to increasing the public awareness of the new proposed system.

“As it stands, the priority for the Unit conceptualizers – whom I followed for over a year during several, detailed meetings in Moscow - is to inform the general public about the new system.”

He also highlights another crucial aspect of the Unit and its potential impact on commodity pricing:

“The Unit can also help to upend unfair pricing in commodity trading, by means of setting up a new – fair and efficient – Eurasian Mercantile Exchange where trading and settlement can be done in a new currency bridging trade flows and capital, thus paving the way to the development of new financial products for foreign direct investment (FDI).”

In July of this year Escobar provided another update that highlighted how Russian President Vladimir Putin has also been briefed on the plan.

“Putin had a special meeting with Dilma Rousseff, president of the BRICS New Development Bank (NDB). They did talk in detail about the bank’s development – and most of all, as later confirmed by Rousseff, about The Unit, whose lineaments were first revealed exclusively by Sputnik: an apolitical, transactional form of cross-border payments, anchored in gold (40%) and BRICS+ currencies (60%).”

To say it’s a done deal would be premature. 

Although in addition to Escobar’s reports, there’s been increasing confirmation that the Unit is indeed being discussed, including a report from TASS Russian news agency earlier this month that the Unit is on the agenda for the meeting in October.

Escobar also released his latest piece today titled Will a BRICS Bretton Woods Take Place in Kazan?, which includes commentary from Russian analysts who have been following the progression of the Unit. 

Which I personally found insightful to get a more full picture of how the news is being perceived in the east.

We’ve heard rumblings about some sort of gold involvement in the monetary system ever since Russia was kicked out of the SWIFT system. And as we approach the BRICS meeting in Kazan next month, we could be getting closer to finding out more about where those plans officially stand.