The credit, energy security and debt boundaries of money constitute the lifeblood of a country's economy, and the petrodollar combines the three very skillfully through US bonds, so the petrodollar is the core of the dollar in this regard.
On the other hand, the United States controls the international foreign exchange system and dominates the share and pricing power of international finance and major commodity transactions, and the US dollar, as a reserve currency, indirectly controls the exchange business between international currencies through the call for wind and rain on SWIFT, in other words, if any economy does not comply with the dollar, then it may be subject to special restrictions by SWIFT, resulting in the country being unable to receive overseas remittances normally.
In the past ten years, this fixed drama has been played out in many oil countries, and in this context, up to now, 17 countries, including China, Russia, Germany, France, Cambodia, Malaysia, Thailand, Pakistan, Iran, Iraq, Nigeria, Kyrgyzstan, Turkey, Qatar, the United Arab Emirates, Venezuela, Angola, etc., have begun to reduce or abandon the use of the US dollar in the field of commodity trading or bilateral currency settlement and switch to other currencies.
For years, emerging market countries have struggled to build a new financial system that is not dependent on the dollar, and the latest news shows that these initiatives will only increase.
The latest development in global de-dollarization is Ghana's announcement on November 24 that it is developing a new policy to buy oil products using gold instead of dollar reserves, providing the latest footnote to the decline of the petrodollar system, in fact, as early as 2011-2012, India and Iran also discussed gold as a settlement method for buying Iranian oil.
Just half a month ago (November 14), the governor of the Central Bank of Egypt also said that the Egyptian pound will soon decouple from the US dollar, while launching a series of monetary policy reforms and officially opening a new national currency indicator in order to de-dollarize the foreign exchange field.
According to Efe Havana reported on November 2, the Central Bank of Cuba has also officially started the process of currency and exchange rate mercy and stopped exchanging with the US dollar, and also asked foreigners not to bring US dollars to the country and will no longer accept US dollars.
At the same time, Iran is also testing digital currencies to circumvent the dollar's restrictions on trading, and the latest development is that the viability of a digital currency backed by the ECB-backed bypassing SWIFT is expected to make new progress in the coming months, according to a senior ECB official speaking on December 1.
In addition, Russia is also studying the proposal to establish a gold-backed cryptocurrency proposed, earlier, the governor of the Bank of England urged global central banks to unite to create a multipolar reserve currency system, which can replace the dollar with a global digital currency to end the dollar's dominance, and the IMF also hinted that it intends to launch a global digital currency similar to bitcoin IMF Coin under the SDR mechanism, aiming to replace the dollar.
But the matter is not over here, after 17 countries such as China, Germany and Russia began to de-dollarize, according to the current situation, three more countries may also publicly de-dollarize, which is surprising.
According to the news released by the Saudi banking regulator on December 2, Saudi Arabia has approved a central bank digital currency plan, and just earlier, Saudi Arabia was opening a way to develop digital currency transactions in the relevant economic and trade with the United Arab Emirates to stop the dollar.
What makes the Fed even more surprising is that on November 23, the central banks of many European countries, the United Kingdom, Canada, Japan and the Bank for International Settlements also formed a digital currency group, aiming to achieve decentralization of some commodity transactions or financial settlements.
Immediately afterwards, India will also continue to import crude oil from Iran using a rupee-based payment mechanism, and subsequently, the UAE has signed a currency swap agreement with India to promote trade and investment, including energy, and exclude the US dollar from settlement.
At the same time, the Indonesian national oil company announced that the company has begun to buy crude oil not denominated in US dollars but in non-US dollar currencies including yuan to maintain financial market stability.
In recent months, the most surprising country has been Vietnam, where the central bank announced that it has authorized businessmen, residents and relevant banks and institutions conducting cross-border economic trade to use RMB or VND for transactions, and can use RMB to settle related goods or services in seven provinces of Vietnam.
It is worth mentioning that these Southeast Asian countries are not major oil producers, and they also want to go to the dollar in trade settlement, which is more like providing a direction for non-oil countries to abandon dollar settlement in some commodity trading areas in need, but the matter is not over here, and another big country may suddenly start to block the dollar, which once again surprises the market.
As a country that has carried the banner of de-dollarization in recent months in order to control soaring inflation and the fall of the yen, in addition to continuing to sell U.S. bonds with heavy hands, Japan's Ministry of Finance and the Financial Services Agency also said in an announcement issued on November 30 that Japan is leading the establishment of an international network for digital currency payments globally, similar to the SWIFT system used between banks, and can bypass the dollar with many countries around the world including Iran in the economic and trade fields such as oil, so as to achieve de-dollar centralization and increase financial options in some commodity fields.
In this regard, Wall Street prophet Peter Schiff wrote on December 2 that by introducing a gold-backed digital currency, it has the ability to weaken the dollar and create a digital fiat currency that all other central banks can support, which is certainly a solution, and ends sooner than most people expect, because of the aggressive policy of the Federal Reserve, the dollar dominates, causing many problems for other countries, therefore, the world should have some kind of transnational settlement currency that does not depend on any country. And these butterfly effects of de-dollarization may intensify, and continue to develop and grow, eventually forming a joint force.
At the same time, the BWC Chinese network will also continue to track this historical process, and behind this, according to the explanation in the latest report of JPMorgan Chase, the current fragmented economic and monetary initiatives in the United States are becoming a catalyst for long-term de-dollarization, which is the real behind-the-scenes driving force of global de-dollarization.
Senior Fed economists wrote again on the New York Fed's website on December 1 that "while the dollar still has a monopoly, it is not immutable" and warned that "the dollar will not be able to maintain monetary kingship forever" because of the latest de-dollarization trend to watch.
In fact, it is nothing new for those who study the history of money if the dollar suddenly loses its status one day, as the pound was, as it was more than 100 years ago, but it is new for Fed economists to openly acknowledge the possibility of a dollar crisis. (End)