Collapse of the international monetary order

After the West blocked Russia’s currency reserves, we see open rupture in the international currency architecture. For the first time, active resistance to the dominance of the U.S. dollar begins to emerge. Not only in Russia and China, but also in South America, Africa and Southeast Asia – and again in Europe.

• In a speech in the summer of 2022, Putin denounces the blocking of currency reserves and the huge inflation of Western currencies.
• In 2022, Russia replaces not only the dollar but also the euro with the Chinese yuan – both as a reserve currency and as a trading currency – for example on the Moscow stock exchange. Russian banks offer their customers accounts in yuan and entice them with high interest rates.
• Russia is also removing the euro from the sovereign wealth fund.
• Putin openly supports the use of the yuan internationally. He is also reviving the plan for a common BRICS currency as an alternative to the dollar.
• In November 2022, Ghana announces plans to pay for oil with gold instead of U.S. dollars.
• In December 2022, there is a historic meeting between Chinese President Xi Jinping and representatives of the Gulf oil states. Xi speaks openly of oil trade in yuan and promises a “new paradigm of cooperation” between China and the Middle Eastern oil states.
• China now also acts as a diplomatic mediator in the Middle East and achieves the adoption of a peace plan between Iran and Saudi Arabia.
• In January 2023, Saudi Arabia announces for the first time its intention to trade oil in currencies other than the dollar. The Saudi finance minister speaks specifically of the euro.
• In South America, Argentina and Brazil start joint work on a monetary union.
• Kenya reaches agreements with Saudi Arabia and the United Arab Emirates in spring 2023 on the purchase of oil for Kenyan shillings.
• At a March 2023 meeting between Presidents Xi Jingping and Vladimir Putin, China and Russia agree to expand economic and military cooperation. Xi formulated the memorable words at the time, “Right now there are changes – the likes of which we haven’t seen for 100 years – and we are the ones driving these changes together.” And Putin responded with a quick, “I agree.”
• Also in March 2023, ASEAN finance ministers and central bank governors meet in Indonesia. High on the agenda were discussions on reducing reliance on the U.S. dollar, euro, yen and British pound for financial transactions and switching to settlements in local currencies. Indonesia even asked its banks to stop issuing Western credit cards.
• Following a meeting with Xi Jinping in China, France’s president Emmanuel Macron also speaks of the need for “strategic autonomy” for Europe and an alternative for the U.S. dollar.
• Also in China, Brazil’s President Lula takes a sharp line against the dollar: “Why should every country have to be tied to the dollar for trade?… Who decided the dollar would be the (world’s) currency?”