The US dollar is undoubtedly one of the most important currencies in the world. In fact, it is the main reserve currency of many countries, used by their central banks. In addition, a large part of international transactions, such as oil, are made in US dollars. Therefore, this currency is of vital importance throughout the world, even if the local currency of whatever country is used. However, there are a number of countries that are going to abolish this currency for a number of reasons.
Which countries are going to abolish the use of the US dollar?
Although, as we have been saying, it is a currency that is gaining importance worldwide, the dollar seems to be disappearing in several countries. However, it is a situation that will benefit the United States, as it will be able to easily get into debt and impose greater sanctions on third countries. Well, in total, there are 11 countries that will stop using the dollar and which are part of the Commonwealth of Independent States (CIS):
- Turkmenistan.
- Uzbekistan.
- Tajikistan.
- Kazakhstan.
- Kyrgyzstan.
- Moldova.
- Armenia.
- Azerbaijan.
- Belarus.
- Russia.
- Ukraine.
The reasons why these countries are going to stop using the dollar are to strengthen the local currency, removing dependence on the US currency and gaining an advantage in the currency markets. As a result of the sanctions imposed by the US on Russia in the war in Ukraine, the de-dollarization process began, starting with the CIS. Thus, during the summit of the Commonwealth of Independent States, at the beginning of January, an agreement was signed by the presidents to form a new financial system. In this way, these countries become less vulnerable to fluctuations in the dollar and make greater internal investment with its corresponding economic growth.
This is how de-dollarization works
This phenomenon tries to reduce the use of and dependence on the US dollar for issues such as currency, investment and international trade. As we have seen before, this is motivated by US sanctions against Russia. Although there are conflicts between Putin and Ukraine, the CIS countries continue to have economic ties and are now seeking to avoid dependence on the dollar. Furthermore, more countries are considering this method, such as the BRICS bloc (Brazil, Russia, India, China and South Africa), while India has renounced the dollar in favor of the United Arab Emirates.
It can be said that the use of national currencies in mutual payments is growing. Remember that to see more news about the economy you can visit the specialized section for this.
