US Treasury Secretary Janet Yellen says America’s foreign policy is pushing countries to find alternatives to the US dollar.
In new testimony before the House Financial Services Committee, Yellen says America’s increasing use of sanctions to freeze assets of sovereign nations drives countries away from the world’s reserve currency.
“In the realm of sanctions, we have very powerful sanctions that are available because of the important role of the dollar in international transactions. The ability to cut off foreign banks or other businesses or individuals from the ability to transact through the US financial system…
The more we have used sanctions, the more countries look for ways to engage in financial transactions that don’t involve the dollar.”
The spotlight on the use of sanctions increased dramatically after the US and its allies froze about $300 billion worth of assets owned by Russia through sanctions in response to its Ukraine invasion.
Back in February, Yellen said she believes those assets should be unlocked and sent to Ukraine to fund the country’s long-term reconstruction efforts.
“It is necessary and urgent for our coalition to find a way to unlock the value of these immobilized assets to support Ukraine’s continued resistance and long-term reconstruction.
I believe there is a strong international law, economic, and moral case for moving forward. This would be a decisive response to Russia’s unprecedented threat to global stability.”
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