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Former U.S. diplomat warns about Saudi’s planned attack on dollar

Saudi U.S. and dollar

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TL;DR

  • Former U.S. official Thomas Hill warns of Saudi Arabia’s potential shift away from the U.S. dollar, intensifying BRICS’ de-dollarization efforts.
  • Saudi Arabia and the UAE, as new BRICS members, could significantly influence global trade networks and currency dynamics.
  • The move poses a strategic challenge to U.S. fiscal policy and the USD’s global dominance, necessitating a coordinated response from U.S. policymakers.

As we all know, the once unchallenged dominance of the U.S. dollar is now facing potential upheaval. A former U.S. State Department official, Thomas Hill, has sounded an alarm over Saudi Arabia’s potential move away from the dollar, a decision that could have far-reaching implications. Hill’s warning comes amid BRICS’ ongoing efforts toward de-dollarization, with Saudi Arabia’s recent inclusion in the bloc adding a new dimension to this dynamic.

Saudi Arabia’s strategic shift

Saudi Arabia’s entry into BRICS, coupled with similar moves by the United Arab Emirates (UAE), marks a pivotal moment in the global financial system. Both nations, now part of the alliance’s 2023 expansion plan, could play a crucial role in BRICS’ de-dollarization initiative going into 2024.

According to Hill, speaking to Business Insider, this development should be a significant concern for the U.S., as BRICS members and aspiring joiners could amplify the process of moving away from the USD.

This trend is not isolated. North African countries, following Egypt’s addition to BRICS, are poised to become some of the most aggressive advocates for de-dollarization. Hill, currently the director for the North Africa Program at the U.S. Institute of Peace, underscores that traditional U.S. allies like Egypt, Saudi Arabia, and the UAE are exploring alternatives to the dollar, with Beijing aiding this transition.

The ripple effect of de-dollarization

The implications of a concerted move away from USD by BRICS nations, especially with the inclusion of key Middle Eastern players, are profound. BRICS’ expansion grants it access to fresh trade affiliations and alternative currency promotion channels. Through Egypt, the UAE, and Saudi Arabia, BRICS can tap into the Greater Arab Free Trade Area (GAFTA) and the Common Market for Eastern and Southern Africa, thereby extending its influence to over 90 countries.

Recent developments indicate a tangible shift. Egypt has issued yuan-denominated bonds, while the Bank of Russia now uses the Egyptian pound in setting ruble exchange rates. Moreover, a collaborative project between China, Hong Kong, Thailand, and the UAE is underway to develop a digital currency platform for cross-border payments, potentially establishing a digital yuan.

This shift away from the dollar could undermine the SWIFT finance mechanism, a key tool used by the U.S. for imposing sanctions. The broader global coordination against the dollar would also affect U.S. fiscal health, limiting its ability to run large federal deficits and maintain low debt costs.

For U.S. policymakers, these developments signal a need for urgent attention and action. The de-dollarization efforts led by BRICS, with the active involvement of countries like Saudi Arabia, call for a comprehensive response from the U.S. government, backed by bipartisan legislative support. The federal government must devise strategies to counter this challenge and preserve the dollar’s standing in the global financial system.

In essence, Saudi Arabia’s potential pivot away from the dollar, as part of a broader BRICS initiative, represents a significant challenge to USD’s global hegemony. This development demands a strategic and well-coordinated response from U.S. policymakers to navigate through the evolving geopolitical and economic landscape. As the world watches these unfolding events, the future of the dollar as the dominant global currency hangs in the balance, heralding a potential reshaping of international financial systems.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Jai Hamid

Jai Hamid is a passionate writer with a keen interest in blockchain technology, the global economy, and literature. She dedicates most of her time to exploring the transformative potential of crypto and the dynamics of worldwide economic trends.

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