Will Geopolitics Accelerate China’s Drive Towards De-Dollarization?

The war in Europe has not only re-drawn strategic lines and trade flows, but with complex sanctions in place, may also have a lasting impact on currency regimes. Beyond the Russia-Ukraine conflict, a different, slower but still more strategic shift is taking place in relations between the United States and China. The US is not seeking a full decoupling of trade between China and the US and its allies – there are many deep dependencies on both sides and, overall, trade continues to grow. China, on the other hand has been casting its political and economic capital into strategic alliances that include notions of a new currency regime – in parts because of the sanctions imposed by the G7 alliance. The question for this paper therefore is whether it is still a question of if de-dollarisation is happening or rather how fast.