Countries harboring terrorists that have been subject to U.S. sanctions forced to consider barter transactions to facilitate international trade,

“to have a chance to avoid restrictions, you need to completely abandon your national interests and simply obediently fulfill any requirements of the White House, as well as American congressmen and senators. And the leaders of Malaysia, Qatar, Iran and Turkey do not agree to such a scheme.

From a technical point of view, there are four possible options for dedollarization that were mentioned or offered at one of the Kuala Lumpur conferences in one form or another: switching to gold (using the “gold dinar”), switching to barter transactions, using national currencies, and the most exotic option – Transition to transactions using cryptocurrencies.

“Obviously, if we “roll back” the level of development of the financial sector and the foreign trade service system of countries vulnerable to American sanctions to the level of barter transactions, then Turkey, Qatar, Malaysia or Iran are unlikely to benefit from this. The transition to barter is the equivalent of a return to the Stone Age. Barter deals are suitable unless for certain point and large trading operations in which very large volumes of goods can be exchanged as part of one or more operations between two large companies. Despite the cumbersome nature of such operations, they nevertheless have one big advantage: they cannot be stopped by financial sanctions, that is, it is possible to block a transaction unless using a military strength. The use of national currencies, which was mentioned by Recep Tayyip Erdogan, is definitely more modern and much better adapted for widespread use in international trade, but it has several serious problems at once.

The first problem is the SWIFT system. With a strong desire, the United States can force the (formally Belgian) system of international bank transfers to disconnect Turkish, Qatari or Malaysian banks, just as the Iranian banking sector is now disconnected from SWIFT. This complexity can be circumvented, but for this you will either have to develop your own analogue of SWIFT (which, in principle, is solvable), or involve some external partner who already has an analogue in the construction of the “de-dollarized financial system”. The choice of such partners is not very large, but it’s quite possible to agree: it is China or Russia – two countries that are already under various American sanctions.

The second problem with the use of national currencies is that they are very volatile, that is, their exchange rate can often change quickly and in a rather unpredictable way, which greatly complicates the work of exporters and the forecasting of any foreign trade activity. Just look at the charts of the Turkish Lira. Malaysian ringgit or Iranian rial to see the seriousness of this obstacle. The problem is partially stopped by expanding the use of currency risk control tools (futures, forward contracts, etc.), which in principle can be done taking into account the fact that Istanbul and Kuala Lumpur remain powerful regional financial centers.

Against this background, gold and cryptocurrencies (unfortunately, the media do not have detailed information about the specific types of cryptocurrencies that are proposed to be used) look like more attractive alternatives for dedollarization. If you use cryptocurrency (the value of which is tied either to the price of gold or to the “basket” of several national currencies), the problem with the electronic payment system is solved much easier and the only risk is the possibility of a serious hacker attack and / or massive disconnection of the Internet as part of the sanctions.” Read more

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