Nations Seek Alternatives to Dollar Amidst Sanctions and Currency Fragmentation
The executive director for Russia at the International Monetary Fund (IMF) highlights that certain countries being barred from the global payments system has led many nations to seek an alternative currency.
The US and its allies’ utilization of economic and financial sanctions against Russia for its involvement in Ukraine is viewed as a means of punishment.
These sanctions, imposed in March 2022, froze approximately $300 billion of Russian reserves and severed Russian banks from SWIFT, a cross-border payment system dominated by the dollar and the euro.
According to the IMF official, the application of sanctions as a tool results in a more fragmented global economy. This dollar weaponization has prompted several nations to explore alternatives when conducting international trade, thereby bypassing the American currency.
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Iran, Brazil, and Saudi Arabia are already observed to be transitioning to yuan for trade with both China and other countries.
Recent reports have indicated that China has secured agreements with numerous countries to settle global trades valued at $582.3 billion in yuan, aiming to circumvent the dollar.
Furthermore, the CEO of Russia’s second-largest bank has suggested that the yuan could potentially surpass the dollar, considering China’s efforts to relax its currency restrictions.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
