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Eurasia Abandoning US Dollar Hegemony One Kick at a Time

Economic integration between nations not in the direct sphere of Western influence is making significant progress, gradually abandoning the US dollar as their primary trading currency


This post first appeared on Russia Insider


The historic energy agreement between China and Russia exemplifies how to De-dollarize as both countries strengthen their ties with payments settled in Yuan and Ruble. It’s still premature to expect some dramatic shift away from the Dollar in oil trade worldwide. Nevertheless, the advent of a petro yuan on the hydrocarbon market, is one of the pillars of the future multipolar world.

Russia’s proposal to set up their own oil-price market is another important step in that direction. There are even rumors of backing the Ruble with gold. This would actually be a sensational move, explaining the reasons why Moscow and Beijing have been buying so much gold in the last year, breaking several records.

Meanwhile, other parts of Eurasia are also integrating: Iran and India have taken the plunge and are now trading in rupees instead of dollars. Considering the importance of Tehran on the oil market and the importance of New Delhi as a consumer, it comes as no surprise that every effort was made to reach such an agreement and to start de-dollarizing their economies immediately. The geopolitical role of the petrodollar continues to be the most important existential factor for Gulf countries, and for Washington as it’s poised to surmount an astonishing 20 trillion-dollar debt in 2017.

The petrodollar-system is also deeply tied to the dollar and its hegemony as the world reserve currency. Eurasian integration depends on a gradual decline in the penetration that the dollar has in their economies. Giving up the US Dollar as the world's reserve currency means sinking the US’ ability to finance wars and allies without restraint. A clear benefit to much of the planet suffering the consequences of American foreign policy.

The US has failed in it’s attempt to divide and hinder the Eurasian integration with the MENA (Middle East and North Africa). The multipolar world is advancing and Beijing, Moscow and Tehran widely understand that their dependence on the dollar is simultaneously Washington’s major lifeline.


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