Japan to Bypass Dollar
Since 2013, the BRICS have been working to duplicate the Western financial infrastructure and other countries have been moving away from the overbearing western systems. Two countries that have been stalwart in their support of the US seem to be falling by the wayside.
The first country had a relationship with the US to denominate the sale of oil in US currency. In return, Saudi Arabia would receive military support from the US. This was the creation of the petrodollar and secured the US dollar as the de facto world’s reserve currency. This relationship held until the last few years, Saudi Arabia has been in talks with Russia to possibly sell an interest in Aramco to the Russians. If this deal goes through, this would inexorably link the two countries and lessen Saudi Arabia’s ties to the US.
The other country has been tied to the US probably since the end of WWII and the US still maintains a US military presence in Japan. Under the current prime minister, Shinzo Abe, Japan has been tearing down its economy with Abenomics. Now it seems that Japan has opening talks with the BRICS to forge a financial ties into the CIPS system and eventually move away from the use of SWIFT.
The SWIFT system requires that users convert the money to be exchanged into US dollars before the transfer and after the transfer is completed the money needs to be converted into the currency of the recipient. The CIPS system does not require the conversion and completes the transfer at a much reduced fee.