The SCO, also known as the Shanghai Cooperation Organization, has recently drawn attention because of its perspective on international trade currencies. The group has 10 member states, including major countries like China, Russia, and India. For this reason, any decisions made by the SCO will affect global economics.
Also Read: 10 SCO Countries Ready To Ditch US Dollar For Trade
Understanding the Trade Risks Associated with the US Dollar in SCO Countries
Recently, the SCO had a summit in Astana, Kazakhstan, and they stated that continuing to use the US dollar in international transactions was concerning. Russian Deputy Prime Minister Alexey Overchuk had this to say:
“Nearly all of the speakers noted the necessity of increasing the share of national currencies in mutual settlements.”
Also Read: SCO Summit: Astana Declaration’s Global Impact
The statement above shows a growing concern for the SCO nations of the possible risks that come with relying too heavily on the US dollar. Overchuk also continued by saying:
“Everyone understands that the use of the dollar is risky from the point of view of international settlements.”
These statements might be the first step into the way SCO members deal with international trade.
The reasons for the concerns on the dollar are:
- Stability of international transactions
- Requirement for national currencies
- US sanctions and control
- The emergence of alternatives
This year’s summit also hosted the first SCO+ meeting with a focus on “Strengthening Multilateral Dialogue – pursuit of sustainable peace and development.” This action may create some more modalities of discussing and addressing these issues.
Also Read: SCO Summit: India Doesn’t Want To Replace US Dollar With Chinese Yuan
These changes could forever change the global financial setup, and the entire planet is watching closely. How do you think this will play out?