US Treasury Secretary Janet Yellen Acknowledges Sanctions Weaponization Could Hurt Dollar Hegemony – Economics Bitcoin News

US Treasury Secretary Janet Yellen spoke about the dangers that sanctions might pose to the US dollar due to the currency’s dominance in international markets. According to Yellen, the government is trying to use the sanctions “wisely”, as it can create a desire to find alternatives to the US dollar.

US Treasury Secretary Yellen talks about the dangers of weaponizing the dollar

Janet Yellen, US Treasury Secretary, pointed out the potential effects that continued use of sanctions could have on the dominance of the US dollar in international markets. In an interview seen by Reuters, Yield acknowledged that such a risk exists in the long term.

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Therefore, there is a risk when we use financial sanctions linked to the role of the dollar, which over time could undermine the dominance of the dollar, as you said. But this is a very important tool that we try to use wisely.

Yellen realizes that such sanctions push countries such as China and Russia to look for alternatives to the US dollar, in order to conduct deals even when they are affected by these sanctions. However, I also made it clear that this is not an easy task due to the unique features of the dollar. Yellen expanded on this, saying:

We have not seen any other country that has the basic infrastructure – the institutional infrastructure – that would enable its currency to serve the world like this.

This is the same conclusion as a report by the Bank of Russia entitled “Review of the Russian Financial Sector and Financial Instruments”, which indicates that the replacement of the US dollar will be difficult due to the current structure of foreign trade.

Sanctioned countries are looking for alternatives

Despite all the difficulties, countries with OFAC-sanctioned individuals and entities such as China, Russia and Iran have begun to develop integration policies that allow them to conduct trade away from the US dollar.

China and Russia have already begun to conduct settlement transactions using the Chinese yuan, with the use of specially designated banks as clearing entities to facilitate these payments. On his recent visit to China, Brazilian President Luiz Inacio “Lula” da Silva called on developing countries to abandon the US dollar and call on BRICS to create a new currency.

Insurance for the BRICS currency will be discussed at the upcoming BRICS summit, which will be held in South Africa in August, according to statements by an official in the Russian State Duma. Russia and Iran are also finalizing an agreement to deepen their trade cooperation, avoiding crippling sanctions imposed by the United States against them.

What do you think of US Treasury Secretary Yellen’s stance on sanctions and the future of the US dollar? Tell us in the comment section below.

Sergio Gushchenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, getting into the world of crypto when the price spike occurred during December 2017. Having a background in computer engineering, living in Venezuela, and being affected by the cryptocurrency boom on a social level, he offers a different perspective on the success of crypto and how it helps people. Those who do not deal with banks and the disadvantaged.

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