The US dollar faces one of the greatest challenges in its recent history. Eleven nations belonging to the Commonwealth of Independent States (CIS) have decided to abandon its use in commercial transactions and to ban the circulation of banknotes within their borders. With this decision, the governments are seeking to strengthen their local currencies and reduce the influence of the US currency on their economies. The decision, which is part of the global trend known as “de-dollarization”, could modify the international financial equilibrium in the coming years and generate new alternatives in the currency market.
The monetary situation: how the withdrawal of dollar bills is progressing and what the Fed has to say
The exit from the dollar in the CIS is for political and economic reasons. Following the sanctions imposed by the United States on Russia in 2022, the member countries (Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine) have increased the use of their own currencies, with more than 85% of transactions being in local currency.
For its part, the Federal Reserve (Fed) is closely monitoring this phenomenon. Although it has not issued a specific statement, it is believed that the US monetary authority will continue to assess the situation and may articulate new policies to mitigate the impact on the global circulation of the dollar.
The official forecast: the Federal Reserve procedure and the deadlines for exchanging dollars
The 11 countries of the CIS have decreed that dollar bills may not be used in any transaction, commercial or private. This ban, which seeks to ensure the definitive dedollarization of the region, will come into force in stages over the coming months.
Each nation will establish its own deadlines and procedures for the exchange of dollars, the central authorities recommend that those who still have US banknotes go as soon as possible to the designated banks. In most cases, a registration and validation process will be required in order to proceed with the conversion to the local currency or the acquisition of alternative assets, such as gold.
To keep up to date, we recommend you follow our economy section, where every day we bring you the latest news on the status of the withdrawal of dollar bills in other countries.
