SCO countries ditching the dollar

The member countries of the Shanghai Cooperation Organization [SCO) have long agreed to scale up the use of their national currencies in trade between their countries.  This is perceived by many around the world that the US dollar will continue its inevitable slide to the backseat, if not the dustbin, of global trade.

The Daily Star reported thus:  “The group—which comprises China, India, Russia and Pakistan alongside four Central Asian states—said `interested SCO member states` had agreed a “roadmap for the gradual increase in the share of national currencies in mutual settlements“, and called for an expansion of the practice.

With China providing the backbone and Russia fleshing out the ways by which countries of the global south could shield their economies from unfair Trump tariffs and threats of sanctions whenever the dotard American president shows symptoms of disliking your face, the Shanghai Cooperation Org have started to expand bilateral swap lines, aside from settling commodity invoices directly in national currencies such as the yuan, ruble, Euro, or rupee.

Aside from these, the group`s members have proposed alternative financial frameworks such as digital platforms.  Wishing to bypass West-controlled financial infrastructure, they also are discussing the establishment of a SCO-wide development bank for the economic growth of members.

The move pushing de-dollarization comes at a time when the United States is reeling under the weight of its foreign debts, which have not crossed the $40-trillion mark.  For several decades since the end of World War 2, the US dominated world trade because the US dollar became the world`s reserve currency.  This privilege enabled the US to overspend for its global wars, regional conflicts and profligacy, printing more dollars and eroding their currency.  While the American people suffer the lack of food and other basic needs just like the rest of the world, the American elite and their ilk in Europe are gobbling up the planet`s wealth and resources.

At the SCO Summit 2025 in Tianjin last year, Chinese President Xi Jinping declared, “Today, when the world situation is becoming more and more difficult and turbulent, SCO countries and the world need new mechanisms for protection and development.“

This new mechanism that Xi talked about was the SCO Development Bank.

Meanwhile, analysts noted that Russia is seen as the main driver of the push towards the use of national currencies.  The reason is obvious, since Russia suffered a series of western sanctions, imposed by the US and its European allies, in response to its war with Ukraine.

Russian gas producer Gazprom recently disclosed that China paid half of its Russian gas supplies in rubles and half in Chinese yuan.  The practice is now being widely used among SCO member countries.