Bypassing currencies.

 In March 2023, "The Reserve Bank of India (RBI) has granted approvals to foreign banks in 18 countries to open Vostro accounts to settle international trade in rupees." "India had proposed the rupee trade settlement mechanism as the domestic currency was under tremendous pressure in the wake of Russia's invasion of Ukraine since February 2022." BT. In 2024, "In what could be a "very game-changing" development for India's trade with the world, many economies big and small have expressed willingness to start trading in rupee with India, Commerce and Industry Minister Piyush Goyal said on March 11." ET. And yet Mr Goyal said two days back that "India will be cautious in its opening up process till the time it is an emerging economy and it has to maintain a balance." ET. If India is to restrict trade, what will other countries buy with the rupee? It is obviously not working because, "India's foreign exchange (forex)  reserves declined $17.76 billion, the sharpest weekly fall, to hit a low of $657.8 billion for the week ended November 15." "The fall was attributed to the strengthening of the US dollar and the central bank's dollar sales to limit volatility in the foreign exchange market." BS. "The Indian central bank, in a rare move, instructed some banks to cut their long positions on the dollar-pair on Friday (yesterday), seeking to reduce speculative bets on the local currency, which is at a record low, four bankers directly familiar with the development told Reuters." ET. If Indian banks are hedging against a weaker rupee, foreigners will naturally be suspicious. At the recent BRICS summit in Kazan, Russia, in October, Russian President Vladimir Putin suggested a system to bypass the dollar. "The system, which Russia calls 'BRICS Bridge', is intended to be built within a year and would let countries conduct cross border settlement using digital platforms run by their central banks." Mint. "But a BRICS basket currency was not a natural fit for any of its member countries' exporters. With no BRICS equivalent of the European Central Bank (ECB), which manages the euro, or of the European Parliament, to which the ECB answers, fundamental questions like who would manage it would have remained unanswered," wrote Prof Barr Eichengreen. Why not use cryptocurrency? Donald Trump has just been elected president of the US. "Campaigning at a July Bitcoin conference in Nashville, Trump promised a new council as part of a crypto-friendly administration." "The industry is pushing for executive orders guaranteeing crypto companies' access to banking services, an end to enforcement actions and other changes." Reuters. But if governments in emerging nations are able to bypass the dollar by using cryptocurrencies, will people be able to bypass government regulations and taxes? "The KYC (Know Your Customer) policy was introduced to eliminate illicit use of cryptocurrencies and decrease crypto transactions' anonymity." "However, decentralized exchanges are unlikely to adopt the KYC and it is impossible to make them comply with government regulations since they are not run or owned by a centralized company or small group of people." Prestmit. "The Reserve Bank of India started a pilot for the e-rupee, devised as a digital alternative to physical cash in December 2022." Reuters. If governments bypass the dollar and people bypass governments, there could be a total breakdown of social order. Better to stick to physical currencies. Brings discipline.