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'''Dedollarization''' typically refers to the geopolitical process of substituting the US dollar for other currencies in strategic areas such as commodity pricing, foreign exchange reserves, and bilateral trade agreements. | '''Dedollarization''' typically refers to the geopolitical process of substituting the US dollar for other currencies in strategic areas such as commodity pricing, foreign exchange reserves, and bilateral trade agreements.<ref>{{News citation|journalist=Gal Luft|date=2018-08-28|title=The anti-dollar awakening could be ruder and sooner than most economists predict|url=https://www.cnbc.com/2018/08/27/the-anti-dollar-awakening-could-be-ruder-and-sooner-than-most-economists-predict.html|newspaper=CNBC}}</ref> | ||
Since 1944, the US dollar, then backed by gold reserves, has been the primary [[global reserve asset]]. In 1971 the US dollars' gold backing was suspended permanently, which thus ushered in a historically unprecedented situation where the global reserve asset is backed by nothing. (this is called a "fiat" currency) | Since 1944, the US dollar, then backed by gold reserves, has been the primary [[global reserve asset]]. In 1971 the US dollars' gold backing was suspended permanently, which thus ushered in a historically unprecedented situation where the global reserve asset is backed by nothing.<ref>{{News citation|journalist=Mike Maharrey|date=2019-11-18|title=U.S. Federal Reserve Notes: “Money” Backed By Nothing|url=https://tenthamendmentcenter.com/2019/11/18/u-s-federal-reserve-notes-money-backed-by-nothing/|newspaper=Tenth Amendment Center}}</ref><ref>{{News citation|journalist=Taha Farooqui|date=2019-10-31|title=29 percent in US unaware what is US dollar backed by; study|url=https://www.cryptopolitan.com/29-us-unaware-what-is-us-dollar-backed-by/|newspaper=Cryptopolitan}}</ref> (this is called a "fiat" currency) | ||
== Geopolitical importance == | == Geopolitical importance == | ||
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In 2017, Venezuela was sanctioned after dropping the US dollar.<ref>{{News citation|journalist=Whitney Webb|date=|title=Venezuela Accused Of Drug Trafficking After Dropping U.S. Petrodollar|url=https://www.mintpressnews.com/venezuela-drug-trafficking-petrodollar/232056/|newspaper=|archive-url=|archive-date=|retrieved=|quote=}}</ref> | In 2017, Venezuela was sanctioned after dropping the US dollar.<ref>{{News citation|journalist=Whitney Webb|date=|title=Venezuela Accused Of Drug Trafficking After Dropping U.S. Petrodollar|url=https://www.mintpressnews.com/venezuela-drug-trafficking-petrodollar/232056/|newspaper=|archive-url=|archive-date=|retrieved=|quote=}}</ref> | ||
In 2021, Russia, China, and the EU are all increasingly interested in reducing their reliance on dollars in their trade.<ref>{{News citation|journalist=Divyanshu Jindal|date=2021-09-18|title=Russia, China and EU are pushing towards de-dollarization: Will India follow?|url=https://moderndiplomacy.eu/2021/09/18/russia-china-and-eu-are-pushing-towards-de-dollarization-will-india-follow/|newspaper=Modern Diplomacy|archive-url=|archive-date=|retrieved=|quote=}}</ref> This comes after the US threatened to suspend Russia's participation in the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system for political reasons.<ref>{{News citation|journalist=|date=|title=Biden Threatens to Cut Russia Off From SWIFT Payment Over ‘Aggression’ Against Ukraine|url=https://21stcenturywire.com/2021/12/07/biden-threatens-to-cut-russia-off-from-swift-payment-aggression-against-ukraine/|newspaper=|archive-url=|archive-date=|retrieved=|quote=}}</ref> | In 2021, Russia, China, and the EU are all increasingly interested in reducing their reliance on dollars in their trade.<ref>{{News citation|journalist=Divyanshu Jindal|date=2021-09-18|title=Russia, China and EU are pushing towards de-dollarization: Will India follow?|url=https://moderndiplomacy.eu/2021/09/18/russia-china-and-eu-are-pushing-towards-de-dollarization-will-india-follow/|newspaper=Modern Diplomacy|archive-url=|archive-date=|retrieved=|quote=}}</ref><ref>{{News citation|date=2021-07-23|title=De-Dollarization Efforts in China and Russia|url=https://crsreports.congress.gov/product/pdf/IF/IF11885|newspaper=Congressional Research Service}}</ref> This comes after the US threatened to suspend Russia's participation in the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system for political reasons.<ref>{{News citation|journalist=|date=|title=Biden Threatens to Cut Russia Off From SWIFT Payment Over ‘Aggression’ Against Ukraine|url=https://21stcenturywire.com/2021/12/07/biden-threatens-to-cut-russia-off-from-swift-payment-aggression-against-ukraine/|newspaper=|archive-url=|archive-date=|retrieved=|quote=}}</ref> | ||
== References == | == References == | ||
Revision as of 17:36, 4 March 2022
Dedollarization typically refers to the geopolitical process of substituting the US dollar for other currencies in strategic areas such as commodity pricing, foreign exchange reserves, and bilateral trade agreements.[1]
Since 1944, the US dollar, then backed by gold reserves, has been the primary global reserve asset. In 1971 the US dollars' gold backing was suspended permanently, which thus ushered in a historically unprecedented situation where the global reserve asset is backed by nothing.[2][3] (this is called a "fiat" currency)
Geopolitical importance
Some speculate that part of the reason for the imperialist destruction Libya was because Gaddafi sought to sell Libyan oil for gold and establish a "Gold Dinar" pan-African currency.[4]
This has been likened to the earlier US attack on Iraq, who just years prior had switched its oil prices from dollars to Euros.[4][5]
In 2017, Venezuela was sanctioned after dropping the US dollar.[6]
In 2021, Russia, China, and the EU are all increasingly interested in reducing their reliance on dollars in their trade.[7][8] This comes after the US threatened to suspend Russia's participation in the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system for political reasons.[9]
References
- ↑ Gal Luft (2018-08-28). "The anti-dollar awakening could be ruder and sooner than most economists predict" CNBC.
- ↑ Mike Maharrey (2019-11-18). "U.S. Federal Reserve Notes: “Money” Backed By Nothing" Tenth Amendment Center.
- ↑ Taha Farooqui (2019-10-31). "29 percent in US unaware what is US dollar backed by; study" Cryptopolitan.
- ↑ 4.0 4.1 "Gaddafi gold-for-oil, dollar-doom plans behind Libya 'mission'?" (2011-05-05).
- ↑ William Dowell (2011-06-02). "Flashback: Petrodollar Warfare – Saddam abandons Dollar for Euro"
- ↑ Whitney Webb. "Venezuela Accused Of Drug Trafficking After Dropping U.S. Petrodollar"
- ↑ Divyanshu Jindal (2021-09-18). "Russia, China and EU are pushing towards de-dollarization: Will India follow?" Modern Diplomacy.
- ↑ "De-Dollarization Efforts in China and Russia" (2021-07-23). Congressional Research Service.
- ↑ "Biden Threatens to Cut Russia Off From SWIFT Payment Over ‘Aggression’ Against Ukraine".