Editor's note: On October 10, local time, Jeffrey · Sachs, a professor at Colombia University in United States and a famous economist, bluntly said that today's dollar has become a "tool of aggressive policy", and the United States government has weaponized the dollar, rather than using it as a medium of exchange or a "store of value". He said countries clearly need an alternative to dollar payment mechanisms, and that it would be ideal if the United States government could "come to its senses" and end unilateral sanctions. This article is reprinted from the Observer.com on October 11.
According to the website "Russia Today", Sachs said in a video link at the meeting of BRICS finance ministers and central bank governors in Moscow that the dollar today has become an "instrument of aggressive policy" and that the United States government has weaponized the dollar instead of using it as a medium of exchange or a "store of value." The meeting focused on improving the international monetary and financial system. The BRICS Summit 2024 will be held in Kazan from October 22 to 24.
In his speech, Sachs said that the seizure and freezing of Russia assets is a manifestation of the weaponization of the dollar by United States, United States it also freezes the funds of Iran, Venezuela, Afghanistan and other countries. About $300 billion in sovereign assets held by Russia in Western jurisdictions are currently frozen.
He said that when the president of United States was able to unilaterally sign an order and seize billions of dollars in Russia assets, "the dollar ceased to be a means of payment" but became an "instrument of aggressive policy."
"For the last 15 years, I've been saying to the United States government, stop it, it's crazy, it's going to destroy trust in the dollar." "This system cannot continue, not just for Russia," Sachs said. ”
He further noted that while China wants to conduct normal trade without the threat of United States sanctions, Chinese banks are also connected to the International Funds Clearing System (SWIFT), and they have to comply with United States sanctions out of fear of being kicked out of the international financial network.
He said the United States sanctions were not only "absolutely wrong" but also violated international law and the UN Charter.
"So, the point is that we need to find alternatives, that's clear." "Countries certainly need non-dollar payment mechanisms," Sachs said. We will need some fast special instrument entities that do not participate in the dollar payment system...... Entities that cannot be directly sanctioned ......"
He also said that if United States can "restore reason, legitimacy and legitimacy" and stop imposing unilateral sanctions, it will be "the best option".
For a long time, United States' abuse of "dollar hegemony" and unilateral sanctions have caused concern in the international community. In a speech last month, former United States President and Republican presidential candidate Donald Trump called "100% tariffs on trade with the United States if you don't use the dollar."
Given concerns that the United States may use the dollar as a political tool or weapon, more and more countries are exploring alternatives to seek settlement in non-dollar currencies in international trade.
In January last year, South Africa Foreign Minister Naled·i Pandor said in an interview with Russian media that the BRICS countries, which are made up of emerging economies, want to find a way to bypass the dollar and build a fairer payment system that does not favor rich countries.
On September 27, Paulo Nogueira Batista Jr., a prominent economist and former ·Brazil representative to the International Monetary Fund (IMF) and former deputy governor of the New Development Bank (NDB) of the BRICS countries, also noted that the dollar has become a "dangerous currency". He stressed that trust in the US dollar as the world's reserve currency has been declining as more and more countries seek alternative currencies in their push for de-dollarization.
Russia's finance minister, Anton · Siluanov, revealed in an interview with Arab television on October 9 that the BRICS countries are trying to create their own international payment systems as platforms operating using Western infrastructure become more politicized. The new cross-border payment infrastructure will be based on new technologies and will enable faster, less costly, and uninterrupted foreign trade transactions.
He said that the BRICS countries will continue to reduce the share of the dollar in bilateral settlements in favor of national currencies, and in the future will also introduce digital financial assets.
It is worth mentioning that as the market's trust in the US dollar continues to decline, the internationalization of the RMB is entering a new stage.
Hong Kong's English-language media South China Morning Post quoted SWIFT data in August as saying that in July this year, the renminbi continued to rank fourth in the ranking of payment currencies, and its share in global transactions rose to 4.74% from 4.61% in June, which is the ninth consecutive month that the renminbi has maintained a proportion of more than 4%.
At the same time, the renminbi also occupies the second place in the global trade finance market with a 6% share, higher than the euro's 5.8% and behind the dollar's 83.2%.
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Established on January 19, 2013, Chongyang Institute for Financial Studies of Chinese University of China (Renmin University Chongyang) is the main funding project donated by Chongyang Investment to Chinese University and set up an education fund for operation.
As a new type of think tank with Chinese characteristics, Chongyang has hired dozens of former politicians, bankers, and well-known scholars from around the world as senior researchers, aiming to pay attention to reality, advise the country, and serve the people. At present, the Chongyang National People's Congress has 7 departments and 4 operation and management centers (the Center for Ecological Finance, the Center for Global Governance, the Center for China-US People-to-People Exchange, and the China-Russia Center for People-to-People Exchange). In recent years, the Chongyang National People's Congress has been highly recognized at home and abroad in the fields of financial development, global governance, major-country relations, and macroeconomic policy.