As the former chief economist of World Bank said, as the US dollar continues to incur various financial restrictions, especially the global commodity trading , the wave of de-dollarization has become irreversible.
One of the progress of global de-dollarization is that, according to Russian media RT on June 23, the Russian Ministry of Finance announced on June 23 that it had settled two US dollar-denominated European bonds "full amount" by paying 12.51 billion rubles (234.5 million US dollars) coupons to the National Settlement and Custody Department (NSD). This is the first payment made under the new mechanism and can be traded in rubles. In other words, bonds denominated in USD have been paid interest on the new payment plan and are paid in rubles.
. The day before, the Russian side stated on June 22 that China, Russia, India, Brazil and South Africa are currently working to establish a new global reserve currency. It will be based on the currency basket of five countries. Russian media said these countries have been promoting the use of their own currencies in mutual trade. Meanwhile, the region using the Russian payment system Mir is expanding. In addition, Russia's financial information exchange system SPFS has similar functions as SWIFT. Russian Central Bank Governor Elvira Nabiullina said in April that most Russian banks and 52 foreign organizations from 12 countries have gained access to SPFS.
Not only that, another new development in the matter is that Russian analysts suggest that Russia should create a stablecoin backed by gold under the tentative name "Golden Ruble". According to the research, Western countries will have no chance to stop operations in this currency, as their exchange rate will be pegged to the gold exchange rate on the world market, rather than to the US dollar, the euro or for that matter, the fiat ruble itself. Gold support will ensure that the currency is exempt from sanctions and the “golden ruble” can be used freely in external transactions, including transactions between third countries without Russian participation.
analysts also proposed to launch a mechanism to facilitate the “gold ruble” trading for sanctioned companies to work with cryptocurrencies in cryptocurrency exchanges in friendly countries. Analysts suggest that the Russian Central Bank should establish its own digital currency international settlement system based on distributed ledger technology and introduce the hedging system to eliminate currency risks. Analysts said that in addition to getting involved in the digital currency world, Russia's new financial system may also include the large-scale use of barter trading plans and the new offshore area.
It is worth noting that Russian oil buyers are currently starting to trade oil in non-USD currencies. Among them, India is very obvious. A new development in the matter is that Russia has offered Indian buyers a "attractive" crude oil discount and accept payments in Indian rupee and UAE Dirham . Russian media quoted Reuters on June 18 that India's purchase of Russian oil soared, and India's imports of Russian oil increased by more than 31 times in the 20 days ending last Wednesday. This growth has emerged despite the U.S. urging India not to increase its purchases of Russian energy.
If India and other markets have to start the process of de-dollarization in order to purchase a large amount of Russian crude oil, then when Israel, as a traditional ally of the US economy and , a neutral country like , Switzerland, , begins to officially de-dollarization, the flame of global de-dollarization may become more and more prosperous. In April this year, the Israeli central bank made the biggest adjustments to its reserve allocation in more than a decade, adding the RMB and three other currencies to its foreign exchange reserves. US financial website Zeroehedge said that Israel sold the US dollar in exchange for RMB and officially announced the replacement of some US dollar reserve shares with RMB.
Under the new method, in Israel's foreign exchange reserve layout, the proportion of RMB in 2022 is set to 2%. To adapt to changes, the euro's share will drop from just over 30% to 20%. This is the lowest level in at least a decade. And the dollar's share will drop from 66.5% to 61%. In other words, Israel is reducing its exposure to the US dollar and euro to increase its exposure to the RMB, US media said.Israel seems to be catching up with meaningful changes in the global monetary landscape. And that's much more than that.
IMFhtmlThe latest report released by 26 in June shows that the RMB's share in global reserves has increased, with the RMB reserve share accounting for 25% of the transferred US dollar reserve share in recent years. From the figure below, we can see that at least six countries in Russia, Brazil, Switzerland, Israel, , Chile, , and South Africa are increasing their RMB reserves, thereby replacing some of the previous US dollar reserve share. Switzerland ranks third in its RMB reserve share after Russia and Brazil.
This is another breakthrough in de-dollarization after Iran officially announced that it would list the RMB, euro, and UAE dirham as the country's main foreign exchange currency, replacing the US dollar status, and announcing the change of Iran's national currency. And at least seven countries in Iran, Russia, Brazil, Switzerland, Israel, Chile and South Africa have replaced some of the functions and reserve status of the US dollar with RMB.
. According to Iranian media reports recently, relevant Iranian institutions are conducting financial negotiations with Switzerland, the United Kingdom, Germany, , Austria, and other countries respectively. One of the main issues of the negotiations is to bypass the US dollar around the use of payment systems related to cryptocurrencies. Previously, the SHTA trade mechanism jointly operated by Iran and Switzerland had carried out many transactions that bypassed US dollar settlement. Switzerland has also shown that it is expanding the scale of SHTA transactions. This means that when Switzerland and Iran cooperated in the monetary field, they not only began the journey of de-dollarization, but also started the process of de-petroleum-dollarization.
In fact, Swiss Bank has formed a joint cryptocurrency development team dedicated to bypassing the US dollar a few weeks ago, and plans to circumvent US dollar payments through joint cryptocurrency. This shows that Switzerland, as a neutral country, has already started the process of collective de-dollarization with the United Kingdom, 19 countries in the euro zone, and at least 22 developed countries in Japan through joint research and development of digital currencies.
You should know that Switzerland has a significant influence in the global financial and currency fields, so the significance of Switzerland's de-dollarization is self-evident. According to OECD data, financial services account for more than 10% of Swiss GDP, more than twice the average level of EU . Switzerland's total banking assets account for 467% of Switzerland's GDP, one of the highest in the world. Switzerland's banking industry has over $6.5 trillion in assets, accounting for 25% of global cross-border assets. Switzerland is one of the world's largest offshore financial centers, , and one of the largest bank confidentiality judicial system and tax havens.
Therefore, when Switzerland began to fully de-dollarize, it is not difficult to understand. The latest IMF data shows that the US dollar's share in international reserve has dropped from the highest 85% in the 1970s to only 58% at present.
American billionaire Jim Rogers believes that the tradition of the dollar reserve status has changed now. As shown in the figure below, the fate of the pound and the gulf, which have been considered the most reliable currencies over the past few centuries, have been replaced afterwards.
Today's dollar seems to be becoming yesterday's pound. This seems to be the inevitable result of the ever-changing changes in the world's economic and trade and commodity trading patterns. (End)
