"De-dollarization" promotes a multipolar monetary system.

The recent agreement between China and Brazil to use each other's currencies for transactions instead of the US dollar has further solidified the growing trend of "de-dollarization" around the world . According to Asia Times, this agreement was quickly followed by similar provisions with 25 other countries and regions worldwide.

It can be said that, currently, Russia and China are the two leading countries in the effort to "de-dollarize" the economy. In the context of increasingly fierce strategic competition for influence in the world among global superpowers, it is not surprising that Moscow and Beijing are taking the lead. Sharing the consequences of Washington's "weaponization" of the US dollar, Russia and China are joining forces to "oust" the US dollar from trade and financial transactions not only between the two countries but globally.

Currently, the BRICS group of leading emerging economies , of which Russia and China are members, is pushing for the creation of a separate reserve currency for the five member countries, which could be based on gold and other commodities, but not the US dollar. This project, known as the R5, would allow countries to gradually conduct bilateral trade without using the US dollar and would also reduce the proportion of international US dollar reserves. Not only China and Russia, but also India, Argentina, Brazil, South Africa, and many regions such as the Middle East and Southeast Asia have been pushing for agreements to reduce their dependence on the US dollar in recent months.

According to experts on sanctions and embargoes, the core of the "de-dollarization" initiative is the concern that the US could one day use its monetary power to target countries in the same way it used sanctions against Russia. It is also an objective response to the unpredictability of US economic and financial policies, as well as Washington's abuse of the US dollar as the world's leading reserve currency.

Last year, the world was stunned when half of the Russian Central Bank's foreign exchange reserves ($300 billion) were frozen. This major blow was just one of the US-led financial sanctions imposed on Russia in connection with the conflict in Ukraine. This incident prompted several countries to take precautions against a similar situation by avoiding reliance on the US dollar, contributing to a trend of using multiple currencies for payments worldwide. Consequently, the role of the US dollar globally will be somewhat diminished.

On Sputnik, Nikita Maslennikov, an expert from the Russian Center for Political Technologies, predicted the possibility of fundamental changes in the international payment and trade order in general, and the world monetary system in particular, in the coming decades. According to Maslennikov, the more currencies serving global trade and the more monetary centers there are, the better. Maslennikov predicts it will take approximately 10 to 15 years to build a multipolar, multi-currency system.

Analysts also suggest that even after the end of the USD's hegemonic era, a new "super currency" is not necessarily needed. Instead, developing countries will leverage their strengths in economic growth and trade cooperation to jointly build a multipolar international monetary system, which is expected to be fairer and more efficient.

Clearly, the trend of "de-dollarization" has paved the way for other currencies to increase their role, especially the Chinese yuan (RMB). In Russia, Western sanctions have tightened both the supply and demand for USD, making the RMB increasingly popular. According to Bloomberg, in February, the volume of RMB traded on the Moscow exchange exceeded that of the USD for the first time, whereas before the Ukraine conflict, the amount of RMB traded in the Russian market was negligible. Earlier this year, the Russian Ministry of Finance stated that the RMB is "increasingly important" to the country's national investment fund.

However, despite the current trend of "de-dollarization" which is shaking the international standing of the US dollar, analysts still believe that the American currency will not easily lose its dominant position. The solid position of the US dollar has been proven after global financial crises such as the collapse of the Bretton Woods system in the 1970s, the introduction of the euro in 1999, and the subsequent 2008-2009 financial crisis. The fact that 60% of the world's central banks' foreign exchange reserves are currently held in US dollars is a testament to this.

XUAN PHONG

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