High-ranking officials from across Asia converged in Tehran this week, placing the spotlight on talks surrounding the ambitious goal of de-dollarization within the region.

Leaders from nine Asian nations came together under the umbrella of the Asian Clearing Union (ACU), opening discussions on lessening the influence of the US dollar on their economies.

Asia’s response to ‘dollar weaponization’

In the 51st ACU meeting, representatives from Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka initiated a crucial dialogue on how to reduce their economic reliance on the dollar.

Notably, figures from non-ACU nations such as Russia, Belarus, and Afghanistan also lent their voices to the two-day gathering, which was coordinated by Iran’s central bank.

Iran’s First Vice President, Mohammad Mokhber, painted the move towards de-dollarization as an essential step in response to the ‘weaponization project of the dollar’.

This term refers to the deployment of the USD as a geopolitical tool which, Mokhber argues, has forced nations to seek alternatives to mitigate the impact of possible future sanctions.

Over the past few decades, Mokhber noted, this weaponization has created a ripple effect, driving countries to distance themselves from the USD, and therefore indirectly undermining the United States’ global influence.

De-dollarization: A global trend

Mokhber’s sentiments echo the growing global trend of nations striving to reduce their dependence on the U.S. dollar. On concluding his remarks, he reaffirmed Iran’s readiness to bolster its banking and trade ties with other nations, particularly the members of the ACU.

In a similar vein, Iran has been amplifying its de-dollarization strategy, progressively moving away from using the USD in its bilateral trade contracts with Russia. Iran’s President, Ebrahim Raisi, recently urged the nation’s central bank to transition away from the U.S. dollar in trade, encouraging the use of national currencies instead. Raisi further indicated Iran’s interest in aligning with the BRICS economic block, comprising Brazil, Russia, India, China, and South Africa, as a counter-move to Western dominance and a step towards a more multipolar world.

Emergence of a common currency?

The BRICS nations are not alone in their bid to decrease reliance on the U.S. dollar. The economic group is reportedly mulling over the creation of a shared currency, a topic that is set to be a key point of discussion at their forthcoming leaders’ summit.

In a similar vein, the ten Southeast Asian countries comprising the Association of Southeast Asian Nations (ASEAN) recently ratified an agreement encouraging the utilization of their national currencies over the U.S. dollar.

The Tehran meeting underscores an emerging trend within the Asian economy, reflecting a collective endeavor to establish financial independence.

As these discussions evolve, the world will be closely watching Asia’s next steps in the journey towards de-dollarization, a potentially transformative move for the region’s economic landscape.

The outcome of these deliberations may well reshape the financial topography of Asia and potentially the global economy.