April 12, 2014
We knew it would happen.
In May 2014, presidents of Russia, Kazakhstan and Belarus will sign an agreement on the establishment of the Eurasian Economic Union. Sections 9 and 11 the agreement, the draft of which is available on the official website of the Russian Ministry for Economic Development, are devoted to the joint monetary policy and financial markets. During the first stage, it is planned to set up an advisory board of the heads of central banks of participating states. The banks would be responsible for the rate of national currencies, regulation of banking and insurance activities and the harmonization of the securities market.
According to the Moskovsky Komsomolets newspaper that cited a source in the Eurasian Economic Commission, the document stipulates for the establishment of the Eurasian Central Bank – the supranational megaregulator of the joint currency. The Eurasian Central Bank will be subordinated to the council of presidents or prime ministers of the EEU.
The name of the new joint currency has been supposedly coordinated – altyn. The new currency is likely to be introduced not later than in 2025, although international economic sanctions against Russia may cut the process to 3-5 years.
The idea of the new joint currency belongs to Kazakh President Nursultan Nazarbayev. In 2012, the idea found support with Vladimir Putin and Dmitry Medvedev. In Russia, altyn was the word to refer to three-kopeck coins.
The President of Kazakhstan is a longtime champion of the introduction of a new supranational reserve currency. He believes the dollar is an illegal and non-competitive means of payment. Nazarbayev said earlier that the “world currency was not de jure legitimate because it was never adopted by any communities or organizations.” “There is no such international law,” he said.
According to Nazarbayev, “the world currency market is not a civilized market, as the system of world currency issuance is not being controlled.” The Kazakh president believes that the world is moving towards a new monetary system: from “defective capitalism” to “the new capitalism that would be based on a non-defective currency – self-growing global wealth.”
I for one welcome our new Russian overlords.