The US dollar has become increasingly toxic in global markets, and this reality is forcing countries around the world to seriously rethink their financial strategies right now. One of the most prominent economists in Russia has said that the dollar is now weaponized to the extent that global countries are scurrying around to seek alternative options and that this is already transforming foreign exchange reserves and currency diversification policies as well as global trade patterns in a manner and extent never experienced in the past.
Also Read: De-Dollarization Gains Momentum: 50+ Countries Abandon US Dollar Dominance
US Dollar Toxic Impact, De-Dollarization, Currency Diversification, And Trade
Expert Sounds Alarm on Dollar’s Political Weaponization
Sergey Glazyev, commissioner at the Eurasian Economic Union and a commissioner of integration and macroeconomics is not beating around the bush in voicing his opinion about how bad Western currencies are doing at the present time. His evaluation has led to main discussions and also one that is an eye opener to anyone following money power in the world.
The only IMF reserve currency that is finally not politically toxic is the yuan. Quite the contrary, mistrust is the main issue of Western currencies like the US dollar, the euro, the pound, and the yen.
These are the weapons of a political war, Glazyev told an interview at the Chongyang Institute for Financial Studies. Many economists have been quietly discussing this profiling of the US dollar as a poison – that the dollar myth of being a neutral global currency has been tarnished and that nations are starting to reward major strategic measures.
China and Russia Lead the Charge Away from Dollar Dependence
The figures make a good argument as to how severe this de-dollarization trend has become. Sergey Lavrov, the Russian Foreign Minister, has disclosed some vital figures to indicate how widely this transition has already taken root. The fact is that practical cooperation between Russia and China is gradually expanding regardless of geopolitical turbulence on a global scale.
Since 2010, China has been the largest trade partner of Russia, and in 2023 Russia took the fourth place among the foreign trade partners of China. In the meantime, their currencies – the ruble and the yuan – now constitute over 90 percent of all mutual trade deals.
Foreign Exchange Reserves Get a Major Makeover
The yuan’s rise in international payments has been particularly noteworthy right now. The latest SWIFT data showed that the yuan’s share in international payments reached 4.69 percent in March, and the currency retained its position as the fourth most actively used in global payments, ahead of the yen.
Experts said that this mirrors steady progress in the yuan’s internationalization and the growing appeal of the yuan as a currency for global payments and settlements.
Digital Solutions Enter the Picture
Glazyev has proposed that Russia and China develop enhanced mechanisms for settlement currencies, and he’s also pushing for the creation of a digital non-banking payment system. This system would be linked to stablecoins backed by commodities like gold, silver and other exchange-traded products.
Perhaps in the near future, BRICS countries can create a new world currency in digital form, guaranteed by commodities and in accordance with international practices, he said.
Both Russia and China have announced that they have established central bank digital currencies. These digital currencies accelerate international settlements, reduce processing fees for cross-border fund transfers and provide emerging markets with an affordable gateway into the global financial network right now.
International Trade Patterns Are Shifting Fast
The impact on international trade has been substantial and also quite rapid. Bilateral currency arrangements are replacing traditional dollar-denominated transactions at a pace that’s surprising even seasoned economists.
Countries are establishing new trade corridors that bypass dollar requirements entirely, and this has instituted numerous significant changes that are fundamentally altering established commerce patterns. What we’re seeing isn’t just a temporary adjustment – it’s a structural change with lasting implications for global finance.
China’s economy is diverse and dynamic, Glazyev said, adding that China is leading in many high-tech areas like solar energy and artificial intelligence, and other information technologies.
Also Read: Analyst Reveals China’s Hidden Agenda To Weaken The US Dollar
The acceleration of these trends suggests that currency diversification will continue expanding, with more countries seeking to protect their economic interests through reduced dollar exposure. Right now, we’re witnessing what appears to be the beginning of a major shift in how global finance operates, and the US dollar’s toxic reputation has catalyzed various major changes across international markets.
