De-Dollarization Gains Momentum: Over 40 Countries Opt for Yuan Amid Global Shift
GG News Bureau
Beijing/New York, 21st Jan. The global financial landscape is undergoing a seismic shift as over 40 countries move to reduce reliance on the US dollar, opting instead for alternative currencies like the Chinese yuan. China’s central bank, the People’s Bank of China, has spearheaded this effort, signing agreements with multiple nations to facilitate trade in yuan. This has propelled the yuan’s share in global transactions from a modest 2% in 2019 to an impressive 4.6% by April 2024.
The Push Toward De-Dollarization
One of the primary drivers of de-dollarization has been the increasing imposition of Western sanctions. Countries targeted by sanctions, such as Russia and Iran, have prioritized the use of their national currencies in trade to bypass restrictions. Iran’s central bank governor, Mohammad Reza Farzin, highlighted the progress, stating, “We (BRICS members Iran and Russia) have entered into a currency agreement with Russia and fully removed the US dollar. Now we only trade in rubles and rials.”
The BRICS bloc—comprising Brazil, Russia, India, China, and South Africa—has also taken robust steps to promote local currencies for trade, further advancing the de-dollarization movement.
Challenges Ahead for the US Dollar
The growing shift away from the US dollar has prompted concern in the United States, with President-elect Donald Trump vowing to tackle the issue aggressively. Trump, set to take office as the 47th President on January 20, 2025, has proposed imposing 100% tariffs on countries abandoning the dollar.
In a recent statement, Trump declared, “Many countries are leaving the dollar. They’re not going to leave the dollar with me. I’ll say, you leave the dollar, you’re not doing business with the United States because we’re going to put 100% tariff on your goods.”
While such a move may aim to deter de-dollarization, experts caution it could backfire, driving more countries toward alternative currencies and accelerating the trend.
A New Global Economic Order?
The rising prominence of the yuan and other currencies in global trade marks a significant departure from decades of US dollar dominance. As nations seek greater financial sovereignty and resilience against economic sanctions, the de-dollarization movement may reshape international trade and finance. Whether the US can counter this shift remains to be seen, but the trend underscores a world moving toward a multipolar financial order.
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