he role of the US dollar as the world reserve currency could diminish due to Washington using its leverage over the global financial system to pursue its geopolitical goals through sanctions, Secretary of the Treasury Janet Yellen has admitted. However, there is no obvious candidate to is replace it, she insisted.
Yellen was asked during an interview on Sunday by CNN\u2019s Fareed Zakaria about the efficiency of the anti-Russia sanctions and about Washington\u2019s track record of what he described as the \u201cweaponization of the dollar.\u201d
Zakaria cited recent statements by Brazil\u2019s President Lula da Silva and other politicians about the risk of dependency on the US currency. He asked whether the present time would be remembered as the moment when \u201cthe dollar\u2019s hegemony and its status as a reserve currency began to falter.\u201d
Yellen acknowledged that use of financial sanctions \u201ccould undermine the hegemony of the dollar\u201d in the long run, but promised that Washington was using this \u201cimportant tool\u201d judiciously and with the backing of its allies.
Regardless, she added, the role of the American greenback is explained by factors such as the volume of the US treasuries market, its wide use in international trade, and a \u201crule of law\u201d in the US that other nations cannot offer.
\u201cWe haven\u2019t seen any other country that has this basic infrastructure and institutional infrastructure that would enable its currency to serve the world like this,\u201d she explained.
Opponents of US domination in global finances are not necessarily advocating replacing the dollar with another currency serving the same role. Russia\u2019s leadership has prioritized a transition away from the dollar and into regional currencies.
An absence of a single global reserve currency would be a natural element of multipolarity, supporters of such a model say. The West\u2019s use of unprecedented sanctions against Russia, including bans on trade, seizure of national reserves and denial of financial services to Russian companies, has merely sped up the transition, in their view.
\u201cIt\u2019s not a coincidence that the talk about a switch to national currencies have been spurred now,\u201d Russian Foreign Minister Sergey Lavrov remarked in February during a discussion on Russia-Brazil trade. \u201cNobody knows who the US president could find unappealing after getting up on the wrong side of the bed.\u201d
Yellen also mentioned the issue of frozen Russian assets in her interview with CNN, arguing that \u201cRussia should pay for the damage that it has done to Ukraine.\u201d<\/p>\n\n\n\n