Moscow, Russia – Russian President Vladimir Putin has acknowledged the US dollar’s role as a cornerstone of the global financial system but cautioned that its increasing use as a political tool is eroding global trust in the currency.
In remarks delivered during a financial summit in Moscow, Putin highlighted the risks posed by sanctions and other economic restrictions tied to the dollar, arguing that these practices threaten the stability of the international monetary system.
Putin’s comments come as a growing number of countries seek alternatives to the dollar to reduce their vulnerability to US sanctions. He noted that the dollar’s dominance has allowed the United States to unilaterally impose economic consequences on other nations by leveraging the currency’s role in international transactions. “The US dollar remains the most important tool in global finance, but its use as a political weapon undermines trust,” Putin said, emphasizing the need for “predictable and reliable” monetary practices in international trade.
In recent years, Russia, alongside countries like China and Iran, has advocated for a diversified global financial system, one less reliant on the US dollar. Russia has actively reduced its holdings in US Treasury securities and increased its reserves in euros and gold, a trend other nations have mirrored amid tensions with Washington. Just last month, China and Russia held discussions about a “de-dollarization” strategy, aiming to expand bilateral trade through their own currencies instead.
Putin also proposed strengthening the role of the BRICS group—comprising Brazil, Russia, India, China, and South Africa—in creating alternative financial mechanisms, including a BRICS currency system that could eventually serve as a counterweight to the dollar. Although still in its early stages, the proposal has gained traction among emerging economies frustrated by the constraints of dollar-based transactions.
Washington has faced criticism for its reliance on dollar-centric sanctions in various geopolitical disputes, from freezing assets to restricting trade in energy and technology sectors. The US Treasury maintains that such measures are crucial for upholding international security. However, Putin argued that this approach is ultimately shortsighted, predicting it would weaken the dollar’s global standing as nations explore alternatives to ensure financial autonomy.
In response, US officials have defended their use of sanctions as targeted actions aimed at promoting accountability without disrupting the broader economy. Still, with the global financial landscape shifting and countries diversifying their reserves, economic analysts suggest that the dollar’s status as the world’s reserve currency may face unprecedented challenges.
As the de-dollarization conversation intensifies, global economists warn that any abrupt shifts away from the dollar could increase volatility in the world economy. While the dollar remains central to international finance, Putin’s warning reflects growing calls to reassess the balance of power in the financial sector—a move that may see traditional alliances reevaluated and emerging markets more vocal on the world stage.
Source: BRICS News
