IMF official says US Dollar weaponization is forcing countries to adopt or develop alternative

Aleksei Mozhin shared his opinion on the Western financial sanction on Russia and noted that the sanction is acting negatively against Western countries. 

In March 2022, the majority of the Western countries imposed financial & trade sanctions against Russia, following the Russia vs Ukraine war. Because of such sanctions, Russia faced difficulties to trade with other countries, as it was also banned from using international payment service support Swift. Following such challenges, Russian government agencies proposed several methods to bypass the need for the US dollar.

Recently Aleksei Mozhin, the executive director at the International Monetary Fund (IMF), said that the decision to lock out some countries (e.g. Russia) created a situation for the struggling countries to find out the best substitute.

Mozhin also directly said that the whole world saw how the US used its US dollar as a weapon against Russia, over its Russia vs Ukraine conflict.

According to the IMF official, sanctions against countries is creating a big problem for the global economy, as the economies of countries are now dividing & further creating some challenges for the developing & developed economies to evolve.

Mozhin said that the net impact & result of such sanctions will bring irreversible outcome. In short, if Western countries remove sanctions from Russia-like countries in the future then that will not bring the situation back again, as they ( struggling countries) will rely on their new alternative methods as a main method for common needs.

“The Americans themselves have created a situation where the search for alternatives to the dollar has inevitably started. And now we see how it’s happening,” an IMF official said.

Furthermore, the IMF official pointed attention toward the surging popularity & adoption of Chinese CBDC ( digital Yuan). 

He noted that Iranians, Brazilians, and Saudis are now switching to trade in yuan not only with China but also with third-party countries, which means they now don’t need US dollar & Swift-like international payment systems. 

Inflation & Bitcoin

Some financial experts believe that if US & other Western countries will not bring changes in such sanctions against such a big economy then the value of the US dollar will face e downfall & that will further create high inflation in the US economy & that net impact will also spread on other countries, as they are dependent on US dollar use. 

Bitcoin proponents believe that if this situation remains similar then surely it will bring an opportunity for Bitcoin & other flagship assets to gain increment.

Read also: Coinbase files motion against SEC’s suit