The Shanghai Cooperation Organization (SCO), a China-led regional organization, is developing a roadmap to transition from using the US dollar to settling in the national currencies of its member states. In an interview with Belarus 1 state TV channel, SCO Deputy Secretary General Grigory Logvinov highlighted the serious and substantive efforts being made in this direction.
Challenges in moving away from the US dollar
Logvinov acknowledged the complexities of the process, as the dollar’s status as a global reserve currency is deeply embedded in national currency systems. He stated that much work remains to be done before the dollar can be fully abandoned.
Established in 2001 in Shanghai, the SCO is a political, economic, and defense alliance that serves as the world’s largest regional organization, covering approximately 60% of Eurasian territory and 40% of the global population. Full members include China, Russia, India, Pakistan, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, with over a dozen other countries, such as Iran, Saudi Arabia, and Turkey, acting as observers and partners.
No common currency plans for SCO members
Despite the planned shift away from dollar settlements, Logvinov noted that SCO members are not currently considering the introduction of a single currency, as no such goal has been set.
Reports suggest that the BRICS group, which also includes China, Russia, and India, is working on creating a new currency for cross-border payments. This new currency is expected to be discussed at the BRICS leaders’ summit in August, raising concerns in the US about the potential erosion of the dollar’s dominance.