As the war in Ukraine rages on and the United States adopts an aggressive approach to China and Bitcoin, the two countries are actively attempting to erode the US dollar’s status as the anchor of the international financial system.
The US dollar remains America’s last superpower, granting it unparalleled economic and political clout. Still, Russia and China’s efforts to diversify away from it have significant implications.
The Decline of US Dollar Dominance
During the recent summit between Vladimir Putin and Xi Jinping, the Russian president supported using the Chinese yuan for settlements between Russia and countries in Asia, Africa, and Latin America. Central banks worldwide hold fewer US dollars in reserve, and trade between Russia and China is increasingly settled in yuan.
The coalition of advanced economies formed by the Biden administration in its economic battle against Russia creates challenges for countries seeking to move away from the US dollar and adopt other stable currencies, such as the euro or pound.
The European Union’s efforts to enhance the euro’s international role, spurred by Trump’s 2018 withdrawal from the Iran nuclear deal, have yet to bear fruit due to lingering doubts about the euro’s future.
China’s
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Author: Ali M.
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