The Russian Foreign Ministry has claimed that de-dollarization is becoming a "global trend," driven by a growing mistrust in the financial mechanisms established by Western nations.
In a post on X, they highlight that the declining trust in Western financial structures is prompting several countries to "reduce their reliance on the U.S. dollar." This movement is being championed by the BRICS bloc and supported by China, India, Brazil, and South Africa.
The Russian government's announcement was accompanied by a meme depicting "the dollar" as a distracted boyfriend turning to look at "other options" while walking down the street.
The Russian administration believes that conducting transactions in national currencies is crucial for achieving financial independence. Currently, they execute over 85% of export payments in rubles and other currencies from friendly nations.
Furthermore, both Moscow and New Delhi, which signed an agreement to this effect four weeks ago, are expanding their gold reserves and developing alternatives to the traditional SWIFT transfer system as a strategy to counter the dollar's dominance.
However, as Moscow celebrates the decline of the U.S. dollar's hegemony, its political ally in the Caribbean, Cuba, is moving in the opposite direction, increasingly relying on the U.S. currency to maintain its crumbling economy.
Just days prior, the Central Bank of Cuba (BCC) announced an official devaluation of the Cuban peso by 242%, setting the dollar at 410 CUP and the euro at 481.42 CUP.
This move officially acknowledges what the informal market had established months ago: the Cuban peso has plummeted, losing nearly all of its real value.
In Cuba, the government has been forced to partially dollarize the economy to survive: stores that operate in freely convertible currency (MLC) deal exclusively in foreign currencies, while salaries and pensions remain in increasingly devalued pesos.
The Cuban peso lacks backing, international reserves are practically exhausted, and transactions in the national currency have been reduced to a symbolic system with no purchasing power.
Cubans can only access basic goods through dollar stores or foreign remittances, a process that perpetuates economic inequality and exclusion.
The so-called "global trend" that Russia refers to seems inapplicable on the Island: there, the dollar still reigns supreme.
The Impact of De-Dollarization on Global and Cuban Economies
What is de-dollarization and why is it happening?
De-dollarization refers to the process of reducing reliance on the U.S. dollar for international trade and financial transactions. It is happening due to a growing mistrust in Western financial systems and the desire for financial independence by countries like those in the BRICS bloc.
How has Cuba been affected by its reliance on the U.S. dollar?
Cuba's reliance on the U.S. dollar has led to a partial dollarization of its economy, where basic goods are only accessible through dollar stores or foreign remittances. This has exacerbated economic inequality and exclusion, as the Cuban peso has lost nearly all its value.
Why is the Cuban government unable to fully de-dollarize its economy?
The Cuban government cannot fully de-dollarize its economy due to the lack of backing for the Cuban peso, exhausted international reserves, and the need for foreign currency to access essential goods and services.