- Russia and China are about to completely move away from their dependence on the US dollar for international trade.
- The latest development was confirmed by Russian Foreign Minister Sergey Lavrov.
Russia and China’s De-Dollarization Progress
Russia and China, two countries from the BRICS alliance that are experiencing economic sanctions from the US, have made great strides recently to ditch the utilization of the US dollar in their international trade settlements. According to the Tass Russian News Agency, Russian Foreign Minister Sergey Lavrov revealed that 90% of trades between the two global supergiants are now being conducted through their respective national currencies.
“Russian-Chinese trade and economic cooperation are actively developing, despite the persistent attempts of the states of the collective West to put a spoke in the wheels,” Lavrov stated during the meeting at the Council of Heads of Russian regions. “There has been an almost complete de-dollarization of bilateral economic relations.”
“Today, more than 90% of mutual payments have been transferred to national currency,” the Russian official went on.
Should the two nations finally complete their decoupling from US dollar trades, it would mean the realization of the goals they established when the BRICS was founded in 2009. The complete switch would also render Western sanctions mostly mooted as their effects would be significantly mitigated.
Lavrov remarked that interaction in the energy sector of Russia has been steadily advancing. This is complemented by the nation’s growing supply of agricultural exports to the Chinese market. Alongside them are joint ventures between the parties in the investment and industrial sectors.
“The mutual benefit from such cooperation is clearly felt on both sides of the Russian-Chinese border,” Lavrov added.
Previously there were talks that the BRICS was pushing for the development of its own payments network powered by blockchain and with cryptocurrency support. The new pronouncements of the Russian foreign minister made zero mention of this subject though.
Critics Chime In
While some US politicians have aired their concerns over the repercussions of the BRICS’ progress in terms of de-dollarization, some analysts believe the efforts of the alliance to dethrone the US currency have proven to be mostly futile. Based on Barchart’s data on X, the US dollar remained the currency of choice by nearly half, or 48.03%, of all global trades.
The euro took nearly a quarter of the market with its 23.22% slice. However, the Chinese Yuan lagged at 3.47% while other currencies, except the British pound and Japanese Yen, made up a 12.32% share.
What’s more, the SWIFT central bank digital currency (CBDC) project has been making major developments, thanks to the participation of 38 global institutions. This could potentially hinder the wider adoption of the planned BRICS digital currency if the alliance eventually proceeds with its rollout.