March 5, 2023
Insider recently published an article featuring Jay Zagorsky, Associate Professor of Markets, Public Policy, and Law, d_iscussing China and Russia’s attempts to compete with the U.S. dollar with alternative currencies._
While Russia is striving to de-dollarize its economy and create a new reserve currency with China, similar attempts to do so have failed in the past. Russia’s economy is fragile, and their attempts to join China’s partnership efforts likely aren’t enough to launch this new currency because of China’s capital controls.
Zagorsky adds, “International investors and traders do not want to use a currency when they are worried their money will get trapped inside a country and they will be unable to move it out.”
Russia is tied to the U.S. dollar through oil trade transactions, especially as Crude Oil is one of Moscow’s top revenue sources, making it even more difficult to challenge the currency.