Putin on dedollarization in 2019 "The US Shooting itself in the Foot"

"Regarding using the dollar in global trade.

I’m not the only one addressing this issue. The president of France talked about this recently. He said that Europe must increase its economic and financial sovereignty.

What does that mean? That means de-dollarization. And Europe is the biggest trade partner of the US.

I recently said that said that our American friend are are shooting themselves in the foot.

They do everything to undermine trust in the dollar as a universal payment instrument.

Once again, it’s a typical mistake of an empire.

Why Because … ‘Empire’ is not a curse word. An empire always thinks it can afford to make mistakes, or incur extra costs. It thinks it so powerful, that this won’t change anything.

But those mistakes and costs keep piling up. At some point the empire can’t deal with them, both in terms of security and the economy. That’s what our American friends are doing.

They’re undermining trust in the dollar as a universal payment instrument, and the main reserve currency. So everybody started thinking of a plan B.

The members of the EU want to trade with Iran. They don’t believe that Iran violated the terms of the nuclear deal with the world community. It actually didn’t.

But our American partners decided to review the deal. Europe doesn’t agree. So America imposes sanctions against any country that trades with Iran. For some reason they were called “secondary”.

Companies in the US market don’t want to lose profit. Some companies will leave anyway. But some companies that aren’r restricted by the US market, will gladly continue working with Iran.

But we need another global trade system, apart from SWIFT, which is the current global transaction system. That’s why more and more companies chose national currency payments.

Yes, the volatility of national currencies, in developing markets is high indeed. That’s inevitable. However, some instruments are being created that lower the volatility.

For example, within the BRICS framework, we’ve created a national currency pool. A joint bank and so on. The instruments are being created. Yes, the capabilities of our bank so far cannot be compared to the ones of the IMF. But we are working on it. Yes, there is a certain degree of volatility. But if we continue working on it, which we are doing constantly, we’ll come up with some insurance and hedging instruments.

It’s possible to create them now. I won’t go into details, but we have created certain plausible instruments with some countries, that will help reduce the risk. Certain correlations can be established.

It won’t happen overnight. Our oil and gas companies aren’t ready to give up dollar payments and switch to national currencies. But if we come up with those instruments. If we manage to de-dollarize our trade and get rid of the volatility of national currencies, we’ll move in that direction.

As soon as it happens, the dollar as universal payment unit. Will have a difficult time.
We’ll see how it goes. We keep moving in that direction, not because we want to undermine the dollar, but to establish our security. We’re always getting new sanctions.

They deny us an opportunity to work with the dollar. That’s why we reduced our dollar reserves.
The central bank had to take care of that.

Why are they doing that? Can’t they pursue their goals without undermining trust in their nation currency? That would be smarter. Still, the US keeps going down that path.

I believe that’s making a big mistake." – Vladimir Putin, Valdai Club, Sochi, 2019