- Russia and Islamic nations are in talks about de-dollarization and the establishment of an independent financial system, with Russia’s relationship with these countries foreseen to have a substantial and promising future.
- Venezuelan President Nicolas Maduro predicts a significant decline in global reliance on the US dollar, pointing to emerging alternative financial initiatives and the rise of multi-polarity in the world.
Russia and Islamic Nations Eye Financial Independence
Aiming to chart a new course in the global financial landscape, Russia and Islamic countries have engaged in discussions about de-dollarization and the formation of an independent financial system. According to Russia’s Deputy Prime Minister Alexey Overchuk, these dialogues are informed by the “current global shifts.” As reported by TASS, the state-funded Russian news organization, the conversations revolve around financial sovereignty, industrial production, and energy and food security.
Overchuk emphasizes that their discourse is driven by global trends and transformations, with the intention to establish an autonomous financial framework. He remains optimistic about the potential growth and prosperity in Russia’s relations with the Islamic states. The Russian government, he says, is committed to fostering this development.
As a response to international sanctions imposed due to the Ukraine invasion, Russia has amplified its financial relationship with Iran. The country’s second-largest bank, VTB, has set up a representative office in Iran, with two Iranian banks gearing up to launch physical branches in Russia. Around 80% of mutual settlements between Russia and Iran now bypass the US dollar, using rials and rubles instead.
De-Dollarization: A Global Trend on the Horizon?
Meanwhile, Venezuelan President Nicolas Maduro anticipates an inevitable and substantial decline in the global use of the US dollar. He credits US sanctions as the primary motivation for nations exploring alternatives to the world’s reserve currency. Maduro highlights the role African nations are playing in leading this shift towards a “de-dollarized” world.
“The more multipolar the world is, the more multicentric the world is,”
he remarks, predicting the emergence of a diversified basket of currencies in the global economic landscape. According to Maduro, the commercial world is witnessing a consistent acceleration in the de-dollarization process.
An important sign of the changing times, Maduro observes, is Zimbabwe’s introduction of a new gold-backed digital currency. This currency serves as both a mode of payment and a store of value for citizens.
Finally, Maduro draws attention to the BRICS economic alliance, which has recently launched the New Development Bank (NDB) to fund public and private projects. The BRICS nations – Brazil, Russia, India, China, and South Africa – are also considering the launch of a global currency that avoids the need to rely on the US dollar.