The desire of the United States to make a political weapon out of its national currency has played against itself. Russian President Vladimir Putin stated this in an interview with American journalist Tucker Carlson.

According to the Russian leader, even against the backdrop of record high levels of national debt and unlimited printing of new banknotes, the dollar was the “foundation of the foundations” of US power. Nevertheless, attempts to use its own national currency to put pressure on political opponents and, in particular, Moscow became Washington’s “gross strategic mistake,” Putin believes.

“As soon as the political leadership decided to use the dollar as a tool of political struggle, they attacked this American power. I don’t want to use any unliterary expressions, but this is stupidity and a huge mistake... Complete nonsense, you know, from the point of view of the interests of the United States itself,” Putin said.

In addition, as the president noted, the sanctions policy against Russia ultimately did not bring the desired result to the United States. Thus, the Russian economy was able to withstand the onslaught of external restrictions. At the same time, the share of the dollar in the country’s foreign trade turnover decreased from 50 to 13%, while the use of rubles and yuan increased to almost 70%.

“It was not we who banned the use of the dollar, we did not strive for this. The United States decided to limit our payments in dollars... Why did the United States do this? I can only attribute this to arrogance. They probably thought that everything would collapse, but nothing collapsed,” Vladimir Putin emphasized.

  • Putin on the transition to payments in rubles and yuan in foreign trade

Let us note that in total there are now almost 19 thousand different sanctions in force against Russia (over 16 thousand of them were introduced since February 2022, after the start of the SVO). This is more than against Iran, Syria, North Korea, Belarus, Venezuela, Myanmar and Cuba combined, according to materials from the specialized database Castellum.AI.

Western restrictions affected the energy, aviation, trade, banking and financial sectors. In particular, Russian credit institutions were disconnected from the international SWIFT platform, as well as from the Visa and Mastercard payment systems. Along with this, almost half of the country’s gold and foreign exchange reserves were frozen (worth $300 billion), and many international companies announced their departure from the Russian Federation.

Under these conditions, some analysts initially predicted a collapse of 10-25% in the Russian economy in 2022. However, according to calculations by the Ministry of Economic Development, the real decline was only 1.2%. Moreover, already in 2023, the country’s GDP managed to fully recover the sanctions losses and grew by 3.6%.

Moreover, even under such unprecedented pressure, Russia was able to overtake Germany in the ranking of the world's largest economies and rose to fifth place after China, the United States, India and Japan. This is stated in the World Bank report.

“Sanctions, restrictions, impossibility of making payments in dollars, disconnection from SWIFT, sanctions against our ships carrying oil, sanctions against aircraft - sanctions in everything, everywhere. The largest number of sanctions that are applied in the world are applied against Russia. And we became the first economy in Europe during this time,” Vladimir Putin emphasized.

With an eye on Russia

Meanwhile, the restriction of Russia’s foreign trade payments in dollars and the partial freezing of its gold and foreign exchange reserves by the West have become an alarming signal for the whole world, the head of state believes. Thus, today many countries, including allies of the United States themselves, are beginning to reduce their reserves of American currency and are increasingly giving preference to more reliable instruments for saving money.

“Everyone looks at what is happening and begins to look for ways to protect themselves... Look, other countries, including oil producers... are already paying for the sale of oil in yuan. Do you understand that this is happening or not? Does anyone understand this in the United States? What are you doing? You are pruning yourself... Ask all the experts, any smart and thinking person in the States: what is the dollar for the USA? You’re killing him yourself,” Putin added.

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One sign that global confidence in the dollar is gradually falling is the record decline in Chinese investment in American government debt. Sergei Suverov, associate professor at the Financial University under the Government of Russia, told RT about this.

According to the latest data from the United States Treasury, if at the beginning of 2022 Beijing stored over $1.03 trillion in Washington government bonds, then in the fall of 2023 the figure dropped to $770 billion. The achieved value was the lowest in almost 15 years.

“Many countries fear that their assets may also be frozen in the West. In addition, the political confrontation between China and the United States also plays a role in the gradual abandonment of the primacy of the dollar. In general, we see the increasing influence of other centers of economic power besides the States. Against this background, although the share of the dollar in world reserves and global trade still remains high, it is still beginning to gradually fall,” Suverov noted.

According to the International Monetary Fund, if in the early 2000s over 72% of world reserves were stored in dollars, today the figure has already dropped to 59%. At the same time, taking into account recent trends, the value will likely fall below 50% in the coming years, says Alexander Razuvaev, a member of the supervisory board of the Guild of Financial Analysts and Risk Managers.

“Most likely, over time, the American currency will be able to supplant the Chinese one. Often in history, the main currencies of account are gradually replaced by one another. This happened, for example, with the pound sterling, and this may happen with the USA in the coming decades,” added the RT interlocutor.