The weaponization of the dollar had the specific purpose to try to collapse the Russian government.
In some ways (many, many ways), the entire purpose of staging this war in the Ukraine was to have an excuse to do these “sanctions” against Russia.
Once it became clear that this did not work, the US should have said “oh, sorry – this was some kind of misunderstanding” and allowed Russia back into the dollar system. Instead, they just kept going, despite the fact they’d clearly lost.
Now, no one in the world – outside of European vassals – wants to deal in dollars any more than they have to.
Anyone could end up on the bad side of the US and have their reverses stolen and their entire trade framework destroyed overnight. If the US will do this because of a minor border dispute, they will do it for any reason at all.
The de-dollarization of Russia-China trade is practically complete, according to Georgy Zinoviev, the director of the Russian Foreign Ministry’s First Asian Department, as cited by RIA Novosti.
The official said the share of the US dollar in mutual settlements between the neighboring nations has substantially shrunk over the past two years.
“The share of national currencies in Russian-Chinese payments is growing at an extremely rapid pace,” Zinoviev told the news agency. “At the beginning of 2022 it was hovering around 25%, now it is exceeding 80%.”
He added that the volume of trading in the ruble-yuan pair on the Moscow Exchange (MOEX) outpaced volumes in the dollar-ruble pair long ago.
According to Zinoviev, Russian and Chinese businesses are “rapidly moving away from the ‘toxic’ Western currencies, opting for the ruble and yuan as more reliable and safe way of payment.”
The diplomat noted that Moscow and Beijing have developed vital tools to make it possible to “facilitate all necessary transactions as much as possible,” despite international political and economic instability that significantly affects financial institutions and their ability to efficiently operate.
This is not as straightforward as it seems, given that the Chinese economy is still dollarized.
But the Russian economy isn’t, and this is creating a framework for the future.