Opinion: The US sanctions are a piping hot mess right now as Europe, China, Russia are getting involved and trying to circumvent the sanctions. Avoiding the mainstream banks have become an issue and since Swift is barred from conducting business with Iran, the chances of Ripple being used as an alternative still exists.
As per the reports by F William Engdahl, Brussels officials have declared the creation of an unspecified Special Purpose Vehicle [SPV] to legally avoid US dollar oil trade and hence the US sanctions.
This declaration to avoid the US sanctions might spell disaster and potentially start new economic warfares and defame the Dollar system domination globally. China and Russia are already involved in the SPV, while India, Turkey could potentially join-in on this deal in the future.
As per the article by Engdahl:
“According to reports from the last bilateral German-Iran talks in Teheran on October 17, the mechanisms of a Special Purpose Vehicle that would allow Iran to continue to earn from its oil exports, will begin implementation in the next days.”
Moreover, US Dollar is, as of now, the dominant global currency for international trade and finance and also a reserve currency, which gives the US power over banks and companies in the rest of the world.
China’s very own alternative to Swift, China International Payment System [CIPS], hasn’t reached any fruition due to the recent Chinese Beijing stock market crisis.
Furthermore, if EU is stubborn with its SPV project, it could create a crack in the dollar edifice and long-term degradation of the US sanctions power. But, the EU and other collaborating countries’ potential to create an alternative has failed.
One possible alternative that is spreading across the communities as an alternative for SPV might be in the form of a blockchain technology, like US-based Ripple’s payment solution xRapid, which could be used, but then again, since Ripple company is US-based, the scenario where Ripple could be an alternative to Swift in the SPV issue is less than likely to happen.
If Ripple decides to sit this one out, there are chances and speculations that Iran’s new cryptocurrency which was revealed last year is backed by Rial and they might use cryptocurrency and blockchain tech of their own to skirt the US sanctions.
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