The share of the U.S. dollar usage for international payments has risen to 42.71% in April, despite the push of some countries towards de-dollarization. The dollar remains the most used currency in international settlements, with the euro taking second place according to data from the Society for Worldwide Interbank Financial Telecommunications (SWIFT).
U.S. Dollar is Still the Preferred Choice for International Settlements
The U.S. dollar remains the most popular choice for making cross-border payments, even amidst a recent de-dollarization push from countries like Russia and China. According to data provided by the Society for Worldwide Interbank Financial Telecommunications (SWIFT), an organization that links banks from all over the world to make international settlements possible, the U.S. dollar was used in 42.71% of the international settlements completed during April, rising from the 41.74% registered in March.
The U.S. dollar’s involvement in international payments remains high even as the U.S. government has recently stepped in to save several banks from bankruptcy and is facing a potential shutdown if President Joe Biden and Congress fail to reach an agreement to lift the debt ceiling — an event that has the possibility of bringing an “economic catastrophe” per Treasury Secretary Janet Yellen’s statements.
Euro Usage and Other Currencies
The same data indicates that the use of the euro has reached only 31.74% of the payments during April, falling from the 32.64% reached in March. Other currencies are used less in international settlements including the Japanese yen and the Chinese yuan.
The Chinese yuan accounted for just 3.51% of the payments made in April, after having a seeing a rate of 4.78% during March, despite the recent push for the internationalization of the Chinese currency. Several countries, including Brazil and Argentina, have already turned to using the Chinese yuan as a settlement currency for bilateral settlements with China. Bolivia is currently mulling the use of the yuan for cross-border payments, and Venezuelan President Nicolas Maduro has declared Venezuela will shift away from the U.S. dollar. stating that the global de-dollarization movement was inevitable.
Russia has also moved to use the Chinese yuan and national currencies to settle some of its payments, as the Western world prepares to further make difficult the connection of the Russian financial system with the world, due to the Russia-Ukraine conflict.
Countries of the BRICS block are also discussing the possibility of issuing a common currency that, according to experts, might challenge the U.S. dollar’s dominance.
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