No major shift toward global de-dollarization, US Treasury claims

By Al Mayadeen English
Source: Agencies
29 Feb 2024 00:05

According to Treasury official Brian Nelson, the US dollar's position remains very strong and that the US economy and its financial system remain in good standing.

This May 4, 2021 file photo shows the Treasury Building in Washington (AP)

US Treasury Undersecretary for Terrorism and Financial Intelligence Brian Nelson said on Wednesday that the United States does not see major developments toward de-dollarization of the global economy.

"There is nothing that we have seen that suggests that there is any significant move to de-dollarization that we proceed in the global financial system," Nelson said during a conversation at the Hudson Institute on Wednesday.

He added that the US dollar's position remains very strong and that the US economy and its financial system remain in good standing.

The ongoing war in Ukraine has spurred debates about de-dollarization in recent years. Mainstream narratives normally highlight the depth and safety of the US financial market, suggesting that the dollar is unquestionably irreplaceable.

But in reality, efforts to de-dollarize the global economy go way back. They became particularly evident when the BRICS expanded to include some of the US's most crucial allies, including Saudi Arabia, which played a pivotal role in the creation of the petrodollar system.

In December 2023, the International Monetary Fund (IMF) reported that in the third quarter of 2023, the US dollar's share in the global central bank reserves sunk to 59.2%.

The results marked a massive plunge from its initial share of 70% at the start of the millennium.

According to SWIFT, a global financial messaging service, collected data showed that the Chinese yuan international payments share hit a record high in November, becoming the fourth most traded currency globally. Cross-border yuan trades have also increased as China's People's Bank carries over 30 bilateral currency exchanges with foreign central banks, including those of Saudi Arabia and Argentina.

In January, a Sputnik analysis revealed more than 30% of UN countries are abandoning the dollar and shifting to national currencies for forwards.

It appeared that countries moving to the non-dollar economic era realized that the usage of green currency comes with a myriad of financial risks that affect payments and savings, especially due to sanctions.

In an interview with Tucker Carlson on February 9, Russian President Vladimir Putin said that the weaponization of the dollar was one of the biggest strategic mistakes made by the US leadership.

Earlier this month, Russian Foreign Minister Sergey Lavrov said that the de-dollarization of Russia's foreign trade has made considerable progress, with about 90% of all mutual payments with China and about 50% with India being made in national currencies.