"We have very powerful sanctions that are available because of the important role of the dollar in international transactions," Yellen told U.S. lawmakers on the House financial services committee this week. "The more we have used sanctions, the more countries look for ways to engage in financial transactions that don't involve the dollar." The U.S. has targeted Russia and Iran with strict financial sanctions in recent years, leading to accusations it's weaponizing the dollar and pushing the so-called Brics group of up-and-coming countries away from the western financial system. The Brics, initially made up of Brazil, Russia, India and China before being joined by South Africa and then Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAEiShares MSCI UAE Capped ETF 0.0%), are major developing countries that have formed an alliance to grow their power and influence on the world stage. The U.S.-led western financial sanctions "will have a certain impact on the international status of the U.S. dollar," Zhao Qingming, a Beijing-based financial expert told the China newspaper Global Times. "In the short term, the position of the U.S. dollar should remain stable, but over time, its position may weaken." Earlier this month, Russia's central bank encouraged the use of bitcoin and crypto to counter Western sanctions imposed over the Ukraine conflict.
Buckle up folks. It's going to be a wild ride.