Andrey Kostin, the CEO of VTB, Russia’s second-largest bank, has called for the Global South to establish a new financial system in order to mitigate the risks posed by the West. Kostin made the remarks during an interview with RT at the Eastern Economic Forum. He argued that the dollar and the entire Western financial system, which is built around it, have been jeopardized by the sanctions imposed on Russia.
Kostin emphasized that Russia’s push towards switching trade to national currencies is not intended to undermine the greenback, but rather a response to the use of the dollar as a weapon. He stated, “The dollar is illegally used as a weapon. It should not be done like this – we’re talking about finance and the economy, why should it be used for other purposes than this. It should be free from political and geopolitical risks.” To illustrate his point, Kostin quoted a famous line from ‘The Godfather Part III,’ emphasizing that finance should not be used as a tool for politics.
According to Kostin, more and more countries are reevaluating their stance on using the dollar in cross-border transactions. He explained that a decade ago, most countries were content with using the dollar, but now they are considering alternatives due to the threats and pressure exerted by the United States. Kostin argued that these circumstances have created a need for the Global South to establish its own financial system based on national currencies.
He stated, “It is the right time for the Global South to start to build up this system because though the Global South removed the colonial system politically after World War 2, the colonial system in the financial sector still exists, the empire built by the US with the help of its allies still works.” Kostin added that if the current situation continues, there could be a threat of the US using the financial system as a weapon.
Kostin’s proposal for a new financial system includes several key principles. He suggested replacing SWIFT with a new messaging system, replacing US-linked correspondent relationships with horizontal links among local banks based on blockchain technology, creating an international depository settlement hub in the Persian Gulf to replace EU-based Euroclear and Clearstream, and developing new instruments for raising capital instead of using foreign currency bonds linked to the West.
In conclusion, Andrey Kostin, the CEO of VTB, believes that the Global South should establish a new financial system to counter the risks posed by the Western-dominated financial system. He argues that the dollar has been used as a weapon and that the Global South should create a parallel system based on national currencies. Kostin’s proposal includes replacing existing financial mechanisms and developing new instruments to ensure independence and sovereignty. The establishment of a new financial system would allow the Global South to reduce its reliance on the West and mitigate potential geopolitical risks.