The economic sanctions imposed by the United States on Russia and other countries threaten the dollar’s hegemony, as target nations look for alternatives, Treasury Secretary Janet Yellen said Sunday.
“When we use financial sanctions related to the role of the dollar, there is a risk that over time it could undermine the hegemony of the dollar,” the U.S. Treasury chief said April 16 on CNN. – Of course, China, Russia and Iran have a desire to find alternatives. But the dollar is used as a global currency for reasons that other countries cannot easily find alternatives.
She said robust U.S. capital markets and the rule of law “are necessary for a currency that will be used around the world for transactions.”
“And we have not seen any other country that has the basic institutional infrastructure that allows its currency to serve the world in that way,” she said.
Yellen went on to say that sanctions are “an extremely important tool,” especially when used by the United States and its allies as “a coalition of partners acting together to impose these sanctions.
When asked about the possibility of using frozen Russian assets to “rebuild war-torn Ukraine,” the U.S. Treasury Secretary argued that “Russia must pay for the damage it has caused.
However, she warned that “there are legal restrictions on what we can do with frozen Russian assets, and we are discussing with our partners what the future might hold”.