Pakistan’s recent oil import from Russia marks a significant move toward de-dollarization, as the transaction was completed using China’s local currency, Yuan. This deal, involving 100,000 tonnes of oil, saw its first 45,000 tonnes arrive in Karachi, with the rest underway. The country’s Petroleum Minister, Musadik Malik, chose not to reveal further details of the commercial aspects of the agreement, but emphasized that the oil importation is a favorable deal for Pakistan.
In addition to the BRICS countries, other non-member nations have taken steps to counter the US dollar’s dominance. Earlier this year, Indonesia indicated potential plans to replace the dollar with an alternative payment method. The country considered the possibility of using their local currency, the Rupiah, for cross-border transactions among Asian countries. Similarly, Brazil’s president, Luiz Lula da Silva, proposed that his nation should abandon the US dollar for another currency.
Alongside the use of their local currencies, some countries are examining the potential of Bitcoin (BTC) as a safer alternative to the US dollar. The cryptocurrency has seen a considerable recovery from last year’s bear market, and its acceptance could fast track de-dollarization efforts. Max Keiser, an advisor to El Salvador President Nayib Bukele, positively noted that the acceptance of BTC could significantly contribute to the goal of de-dollarization.
The increasing interest in alternative currencies for international trade could weaken the US dollar’s position in global markets. While this shift has potential benefits for participating countries, it does raise questions about long-term implications on the stability of global markets. Adopting different currencies for trade relations brings a certain level of risk that nations must weigh against the benefits of reduced reliance on the US dollar.
In conclusion, Pakistan’s recent oil import from Russia, using China’s Yuan, is evidence of the growing momentum towards de-dollarization amongst various nations. The long-term success of these efforts, however, may rely upon careful consideration of risk factors and the potential instability introduced by the use of alternative currencies in international trade.
Source: Coingape
