ASEAN Finance Ministers Flirt With Going Away From United States Dollar

Finance ministers and central bank governors from the Association of Southeast Asian Nations (ASEAN) have held meetings to discuss ways to leave the dollar and euro in their financial transactions and transition towards conducting settlements in local currencies.

The meeting was held in Indonesia and was centered on discovering ways to limit dependence on developed countries’, predominantly from the West, currencies, such as the British Pound, Euro, US Dollar, and the Yen through the Local Currency Transaction (LCT) system, which is an extension of a previous settlement system that has started to be implemented among ASEAN member nations and allows for local currencies to be traded.

Last November, countries such as Indonesia, Malaysia, Singapore, the Philippines, and Thailand reached an agreement on a similar system. Indonesian President Joko Widodo urged for regional governments to start using credit cards that local banks issued and gradually halt the usage of foreign payment systems. In addition, Widodo stated his country needed to protect itself from geopolitical earthquakes, calling attention to the sanctions directed against Russia’s financial sector over the Russo-Ukrainian conflict. 

Departing from Western payment systems is necessary to shield transactions from “possible geopolitical repercussions,” Widodo stated, continuing, “Be very careful. We must remember the sanctions imposed by the US on Russia. Visa and Mastercard could be a problem.”

ASEAN is composed of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. According to the International Monetary Fund (IMF)’s figures, the total nominal GDP of ASEAN in 2023 is roughly $3.9 trillion.

Singapore is the only ASEAN member state that has enforced Western sanctions on Russia.

ASEAN is part of a growing number of countries across the world that have moved away from conducting trade in US dollars as a result of the US political elites’ economic warfare campaign against countries that don’t bend the knee to its universalist agenda. As the US grows more socio-economically unstable and over-extends itself abroad, more countries will slowly opt out of the dollar.

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