China and Russia, two of the world’s most powerful countries and allies, are uniting to dethrone the US dollar. While Russia has already urged Middle Eastern oil producers to abandon the dollar, China has also joined Russian anti-USD efforts to support the process.
The two countries unanimously decided to restrict the use of the US dollar as the main trading currency. Both China and Russia are exploring multipolar monetary initiatives, which include deploying the ruble and yuan as the primary currencies for trade and economic interactions between the two countries, in place of the US dollar.
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China and Russia will carry out billions in trade without using the dollar
According to SL Kanthan, a noted political analyst and podcaster on X, China and Russia will engage in trade worth $260 billion without using a single dollar in exchange for the raw materials purchased. Kanthan then explained how the two countries would conduct trade using the ruble, yuan and euro, making a strong case for dedollarization.
“$260 billion in trade between China and Russia this year… But almost none of the US dollars will be used!” It will be 95% Chinese yuan and Russian rubles. Maybe a few euros are involved. This dedollarization will soon be replicated among all BRICS+ members.
The analyst explained how this ideology of abandoning the dollar could soon be replicated and adopted by the rest of the BRICS countries, who are collectively uniting to dethrone the United States and the dollar’s status as the global reserve currency .
This is not the first time that China and Russia have stopped trading with the dollar. The dedollarization initiative was already underway and intensified in 2023 when the two countries officially began exchanging currencies in yuan and rubles.
Russia has been trading the yuan for some time, purchasing goods and raw materials from major nations. The list includes trade with Mongolia, the Philippines, Malaysia, the United Arab Emirates, Thailand, Japan, Tajikistan and Singapore.
The United States could impose sanctions on Chinese banks
Recently, the United States has taken the lead in sanctioning Chinese banks by limiting their ability to help Russia. According to the WSJ, the United States suspects that increasing trade channels between Russia and China contribute to Moscow’s military prowess. The United States expressed skepticism, adding that Russia’s military buildup could prove negative for Ukraine.
The report further cited unnamed U.S. officials, adding that the United States may prepare a draft sanctions targeting some Chinese banks. This measure is specifically aimed at limiting Beijing’s ability to help Moscow in any way possible.
However, a new report from Reuters indicates that US authorities have for the moment shelved plans for sanctions against Chinese banks. The report also mentions that the authorities could resort to diplomatic action to curb the current situation.
reference: watcher.guru