The current threat to exclude Russia from the SWIFT payment network only hastens the demise of the Almighty Dollar, a demise foreshadowed in 2009, after the 2008 Global Financial Crisis.
Zhou Xiaochuan, the world’s leading banker, and Governor of the PBOC, announced,
The world needs an international reserve currency that is disconnected from individual nations and able to remain stable in the long run, removing the inherent deficiencies caused by using credit-based national currencies.
Zhou proposed Special Drawing Rights, SDRs, whose value is calculated every midnight against a weighted basket of the world’s traded currencies, cutting reserve currency fluctuations by 90%
Nobelists C. Fred Bergsten, Robert Mundell, and Joseph Stieglitz agreed, “The creation of a global currency would restore a needed coherence to the international monetary system, give the IMF a function that would help it to promote stability and be a catalyst for international harmony”.
Despite the massive difficulty (American resistance is but one) inherent in making this once-in-a-century changeover, progress has been swift:
Beijing began valuing its yuan against an SDR currency basket in 2012.
The IMF made its first SDR loan in 2014.
The World Bank issued the first SDR bonds in 2016.
Standard Chartered Bank issued the first commercial SDR notes in 2017.
The world’s central banks began stating their currency reserves in SDRs in 2019.
China has been actively internationalizing the RMB since 2012. It is now included in the IMF currency basket, and holds fifth place in global currency holdings. (With faith in the dollar shaken by ballooning debt and inadequate leadership, Russia moved 25% of its international reserves to RMB while dumping an equivalent amount of US dollars).
Most of the world’s countries have already applied to participate in either the EEEU, Russian trading/currency initiative, or its BRI/RCEP equivalent and some, like Thailand, already belong to both, and arbitrage customs jurisdictions to their great benefit.
Those benefits will soon be available to all members, since all are negotiating a merger of equals.
Within such a gigantic trading bloc – containing the vast majority of global growth –it makes no sense to use the US dollar.
Doing so endangers countries’ independence, as we are seeing.
By 2025, the US dollar will account for less than half of global global reserves and, having lost its monopoly, will lose its inordinate privilege.
"By 2025, the US dollar will account for less than half of global global reserves and, having lost its monopoly, will lose its inordinate privilege." we need to move much more quickly than that! fs
Thank you for the good news Mr Roberts, and kind regards.