Dominance of the dollar has been strongly challenged over the last decade or so, and Asia is a major challenger.

War in Europe is proving to be a catalyst in the path to independence from an American led financial ecosystem. The use of SWIFT as a “weapon” in the war by the US (not saying it was the wrong thing to do) has impacted the trust in these financial models.

India and China have been promoting their respective currencies CNY and INR for trade long before the war. China had even built a cross border payment system countering SWIFT called CISP. This trend is getting to another level now.

Asia, Europe, Middle East are well connected now and improving further. Support from groups like G20 has also helped.

The group representing the largest emerging economies in the world called, BRICS, which includes Brazil, Russia, India, China and South Africa along with the Middle Eastern economies dominating the oil production, are all pitching for an alternate to the “Petro” dollar. Many other emerging economies, like Bangladesh, Kenya are also willing to trade in alternate currencies.

The start of the fall of the petro dollar

Along with Chinese Yuan, a new currency representing the BRICS economies is a potential alternate to dollar. The trade transactions that move the world, oil and gas, food, textile, and more will have an impact. A diversified currency set for key trade across the world doesn’t sound such a bad idea, but there are many risks that makes USD the preferred currency.

It wont be easy to dethrone the dollar from its almost absolute position in the world economy but war is know to push innovation to the next level, this time probably wont be any different. Innovation, at least in areas of interest to the people in command, and seems like finance is of some interest to the leaders running major developing countries.

Dominance of the dollar has been strongly challenged over the last decade or so, and Asia is a major challenger.

Must Read

Related Articles

Stay in Touch