Escobar: Gold-Backed Currencies to Replace US Dollar in Global South
The comments below are an edited and abridged synopsis of an article by Pepe Escobar
The adoption of commodity-backed currencies by South America could upend the US dollar’s dominance and level the playing field in international trade.
First: One of the key take-aways from the World Economic Forum meeting in Davos was when Saudi Finance Minister Mohammed al-Jadaan, on a panel on ‘Saudi Arabia’s Transformation,’ made it clear that Riyadh “will consider trading in currencies other than the US dollar.”
So is the petroyuan finally at hand? Possibly, but Al-Jadaan opted for careful hedging:
“We enjoy a very strategic relationship with China and we enjoy that same strategic relationship with other nations including the US and we want to develop that with Europe and other countries.”
Second: The central banks of Iran and Russia are studying the adoption of a stable coin for foreign trade settlements, replacing the US dollar, the ruble and the rial.
The crypto crowd is already up in arms, mulling the pros and cons of a gold-backed central bank digital currency for trade that will be impervious to the weaponized US dollar.
Up for discussion: A gold-backed digital currency; a fairer payment system; are you ready for the R5; a new gold standard; all Global South eggs in one basket; and the race to replace the dollar.