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Pakistan’s Bold Gamble: Can it Build a Riba-Free Economy?

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By Aamer Yaqub

Imagine a world where money doesn’t just grow—it heals. That’s the vision 2,000+ global leaders brought to life at the 8th World Islamic Economics and Finance Conference (WIEFC) with Islamic Finance Trends 2024 in Lahore this January. Forget stuffy lectures—this was a revolution. Pakistan, often overlooked in global finance debates, suddenly became the heartbeat of a $4.5 trillion ethical finance movement. From AI tools sniffing out hidden interest to ‘green Sukuk’ funding hurricane-proof homes, this conference didn’t just talk about change—it blueprinted it.

Why should you care? Whether you’re a student, investor, or just tired of Wall Street’s greed-first mindset, Islamic Finance Trends 2024 is reshaping how money works for everyone. Think climate action funded by ethical bonds, apps that calculate Zakat in seconds, and microloans lifting farmers out of poverty—without interest.

Stick around. We’re breaking down the conference’s biggest reveals, from Pakistan’s bold legal reforms to the tech tools making ethical finance as easy as ordering Uber Eats. Spoiler: This isn’t just about halal banking—it’s about building a financial system that doesn’t leave anyone behind.

Pakistan’s Legal Revolution—A Model for the World

Pakistan’s bold legislative reforms have turned heads globally. The 2022 Federal Shariat Court (FSC) ruling, which declared interest-based systems unconstitutional, set off a chain reaction. By 2024, the 26th Constitutional Amendment cemented this shift, mandating a full transition to Shariah-compliant finance by 2028. But what does this mean in practice?

  • Pakistan’s Islamic banking assets soared to 50 billion in 2024, up from 30 billion in 2022. This growth now represents 22% of the nation’s total banking sector, with projections hitting 35% by 2027. Analysts attribute this surge to regulatory incentives, including tax breaks for Shariah-compliant institutions and public awareness campaigns.
  • Globally, the Islamic finance industry expanded by 14% in 2023, driven by Sukuk issuances worth 250 billion a record high. Saudi Arabia’s12 billion sovereign Sukuk and Indonesia’s blockchain-based offerings contributed significantly.

Malaysia, a pioneer in Islamic finance with a $900 billion industry, recently signed a knowledge-sharing pact with Pakistan. “Their regulatory framework is a gold standard,” noted Bank Negara Malaysia’s governor, citing Malaysia’s dual banking system, which allows conventional and Islamic banks to operate side-by-side. Key features include:

  • Shariah Advisory Councils: Independent bodies that audit financial products.
  • Tax Neutrality: Equal tax treatment for Islamic and conventional instruments.

Saudi Arabia’s Vision 2030 has allocated $1.2 billion to develop fintech solutions compliant with Shariah principles. The Saudi Central Bank (SAMA) launched a sandbox in 2023, testing 40+ startups focused on digital Zakat platforms and AI-driven Murabaha contracts.

Dr. Hussain Qadri’s Vision: Beyond Compliance

In his keynote, Dr. Hussain Mohi-ud-Din Qadri warned against “checklist Islamization.” He argued:

“Replacing ‘interest’ with ‘profit’ in contracts isn’t enough. True Islamic finance must dismantle systems that perpetuate inequality.”

His speech highlighted Pakistan’s new Zakat-based social safety net, which redistributes 2.5% of assets annually to 8 million low-income families. The program uses biometric verification to prevent fraud, ensuring 98% of funds reach intended recipients.

Converting Pakistan’s $130 billion interest-based debt into Shariah-compliant instruments is a Herculean task. The solution? Asset-backed Sukuk—a financial instrument that ties returns to tangible assets like infrastructure or renewable energy. Unlike conventional bonds, Sukuk holders own a share of the asset, aligning with Islam’s prohibition of speculative risk.

In March 2024, Pakistan issued $2 billion in green Sukuk to fund wind farms in Sindh. The offering was oversubscribed by 300%, attracting investors from the UAE and Singapore. By 2025, these projects are expected to power 1.2 million homes and cut carbon emissions by 4.5 million tons annually. Key terms:

  • Tenure: 10 years.
  • Profit Rate: 7% annually, tied to energy sales.
  • Guarantor: International Finance Corporation (IFC).
  1. Nigeria: Lagos State’s $1.25 billion Sukuk funded the Lekki Deep Sea Port, creating 170,000 jobs. Investors receive profits from port operations, with returns averaging 9% since 2024.
  2. Indonesia: The world’s first blockchain Sukuk raised $500 million in 2024, with 60% of buyers under 35. Built on Ethereum, the platform allows real-time tracking of proceeds.
  3. Germany: Tesla’s Berlin Gigafactory secured €750 million via hybrid Sukuk, blending Islamic finance with ESG principles. Proceeds fund solar panel installations and worker housing.

In Punjab, a pilot project offers micro-Sukuk to small farmers. Instead of loans, investors receive a share of harvest profits. Early results:

  • 40% rise in crop yields due to better equipment access.
  • Default rates below 2%, compared to 15% for traditional microloans.
  • Farmers like Ali Raza, 42, report higher incomes: “I used to pay 20% interest. Now, I share 10% of my wheat profits—it’s fairer.”

Education Crisis—Building the Next Generation of Experts

The Islamic finance talent gap is staggering. With 1.9 billion Muslims worldwide, the industry needs 1 million new professionals by 2030—but current graduation rates meet only 30% of demand.

Since 2006, Kuala Lumpur’s International Centre for Education in Islamic Finance (INCEIF) has trained 25,000 professionals across 100 countries. Its secret? A curriculum blending Shariah, finance, and tech. Courses include:

  1. Fintech Ethics: Balancing AI with Shariah principles.
  2. Climate Finance: Structuring green Sukuk.
  3. Pakistan’s new National Islamic Finance Development Fund (NIFDF) aims to replicate this, targeting 10,000 graduates by 2030. The fund partners with 15 universities to offer scholarships and internships.
  • Egypt’s NowPay: This AI platform offers “halal investing” tutorials to 500,000 users monthly. Interactive modules simulate real-world scenarios, like screening stocks for Shariah compliance.
  • Saudi Arabia’s Hala: A robo-advisor that screens 10,000+ stocks in real-time using algorithms vetted by scholars. Users grew by 300% in 2024.

A 24-year-old graduate of Lahore’s Islamic Finance Academy, Rahman now designs Sukuk for a Dubai-based bank. “My internship at Malaysia’s CIMB Islamic changed everything,” she says. “We need more cross-border programs.” Rahman’s team recently structured a $500 million Sukuk for a Saudi solar project, integrating ESG metrics.

Ethical Finance Goes Global—Unexpected Adoption

Islamic finance is no longer confined to Muslim-majority nations. From London to Tokyo, ethical banking is resonating with ESG-focused millennials.

Launched in 2024, Britain’s first fully Shariah-compliant pension fund attracted £300 million in six months. “Even non-Muslims are opting in,” says fund manager Amina Khan. The fund excludes companies with debt-to-asset ratios above 33%, aligning with Shariah’s risk-sharing ethos. Top holdings include Unilever and Nestlé, both screened for ethical supply chains.

Goldman Sachs’ Islamic ESG ETF saw $1.2 billion in inflows in Q1 2024, outperforming conventional funds by 8%. The ETF uses a dual screening process:

  1. Shariah Compliance: No alcohol, gambling, or interest-based income.
  2. ESG Metrics: Companies must score B+ or higher on climate audits.

Toyota’s $500 million Sukuk funded a hydrogen-powered vehicle plant in Osaka. Meanwhile, 40% of Japanese homebuyers now consider “ethical financing” a priority—up from 12% in 2020. Firms like Japan Islamic Finance Consultancy (JIFC) facilitate Musharaka (partnership) agreements, where banks and buyers co-own properties.

Pakistan’s 2028 Roadmap—Bold or Overambitious?

Dr. Qadri’s WIEFC address laid out a three-pillar strategy:

  1. National Islamic Finance Development Fund:
    • $200 million pool with 30% reserved for women-led startups.
    • First project: A blockchain Zakat platform to track donations from source to beneficiary. Pilot launches in Karachi in 2025.
  2. Regulatory Sandbox:
    • Testing AI Shariah auditors that scan contracts in seconds. The AI cross-references 50+ scholarly opinions to flag non-compliant terms.
    • Pilot with Karachi’s Stock Exchange begins Q3 2025.
  3. Rural Inclusion:
    • 15 million unbanked Pakistanis to gain mobile Islamic banking access by 2027.
    • Partnering with China’s Alipay to deploy 10,000 agent networks in villages. Agents earn commissions for onboarding users.
  • Skeptics: “Egypt took 15 years; Pakistan’s 2028 deadline is reckless,” argues Cairo-based economist Dr. Farid. He cites Egypt’s 2004-2019 transition, which required rewriting 120+ laws.
  • Supporters: “Iran eliminated interest in 18 months post-1983,” counters Dr. Qadri. The Central Bank of Iran replaced interest with “expected profit rates,” though critics argue this is semantics.

Climate Action—The Unlikely Role of Islamic Finance

A surprise WIEFC theme was climate change. With 63% of Sukuk funding green projects, ethical finance is becoming a climate ally.

In March 2024, the UAE’s $1.5 billion green Sukuk for Dubai’s Mohammed bin Rashid Solar Park sold out in 3 hours. The project will offset 6.5 million tons of CO2 yearly—equivalent to taking 1.4 million cars off roads. Investors include BlackRock and Norway’s sovereign wealth fund.

After 2022’s catastrophic floods, Pakistan launched Qard al-Hasan (benevolent loans) for rebuilding. Features:

  1. 0% interest, 5-year repayment grace period.
  2. 200,000 homes rebuilt by 2024, using climate-resilient designs like raised foundations and bamboo frames.

Technology—A Double-Edged Sword

As AI reshapes finance, WIEFC speakers debated: Can algorithms uphold Shariah ethics?

  • Bahrain’s Rain: A crypto exchange screening tokens for Shariah compliance. Rain’s scholars reject tokens linked to gambling or excessive debt.
  • Pakistan’s Nayapay: Mobile app offering AI-driven Zakat calculations to 2 million users. The app scans bank statements and suggests donations based on income and assets.

Dr. Kamarul Zaman Yusoff warned:

“Technology can’t replace scholars. An AI might miss the maqasid (higher purpose) of a transaction.” He cited a 2024 case where an AI approved a contract with hidden interest (Riba), later overturned by scholars.

Lagos State Governor Babajide Sanwo-Olu:

“Our Sukuk-funded port proves Islamic finance can drive development without debt traps. We’re replicating this model for schools and hospitals.”

France’s Ethical Banking Experiment

Société Générale’s Paris branch now offers Shariah-compliant mortgages. Client Marie Dupont:

“I’m not Muslim, but I prefer their transparent pricing. No hidden fees—just a fixed profit rate.”

Finance Minister of Indonesia Sri Mulyani Indrawati:

“Young investors want tech and ethics. Blockchain Sukuk delivers both. Our next step? Tokenizing Waqf (endowment) assets.”

The WIEFC 2025 made one truth undeniable: Ethical finance isn’t a niche—it’s the future. As Dr. Qadri concluded:

“Profit and piety can coexist. Our task is to build systems that honor both.”

What began in Pakistan’s flood-ravaged villages with interest-free Qard al-Hasan loans now echoes on Wall Street through Goldman Sachs’ billion-dollar Islamic ETFs. Islamic Finance Trends 2024 aren’t just reshaping markets—they’re rewriting the rules of ethical wealth. From Saudi Arabia’s $12 billion green Sukuk funding solar megaprojects to Indonesia’s blockchain-powered bonds attracting Gen Z investors, this year has proven one truth: money can uplift communities and portfolios when guided by conscience.

Pakistan’s bold legal reforms—eliminating Riba by 2028—show how nations can balance faith and finance. Malaysia’s education hubs and Nigeria’s Sukuk-funded ports prove this isn’t a niche movement. Even skeptics can’t ignore the numbers: a $4.5 trillion industry growing 14% annually, 63% of Sukuk funding climate projects, and apps like Egypt’s NowPay making halal investing as easy as TikTok.

But the real win? Islamic finance’s DNA—zero interest, shared risk, and ESG alignment—is pushing all finance toward fairness. Whether you’re a farmer in Punjab accessing micro-Sukuk or a Tokyo salaryman choosing ethical mortgages, 2024’s trends offer a roadmap: profit doesn’t have to come at humanity’s expense.

Courtesy: Halal Times


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BUSINESS & ECONOMY

What is the Role of Bosnia in Strengthening Halal Supply Chains in Europe?

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5 days ago

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March 20, 2025

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 Hafiz M. Ahmed

Imagine walking into a supermarket in Paris, Berlin, or London, scanning the shelves for halal-certified products. You pick up a pack of chicken, a bottle of olive oil, and a box of cookies, all bearing the halal logo. But have you ever wondered how these products made it to the shelf? Behind every halal-certified item lies a complex supply chain that ensures its authenticity, safety, and compliance with Islamic principles. In Europe, where the demand for halal products is growing rapidly, building a reliable and transparent halal supply chain is no small feat. Enter Bosnia and Herzegovina, a country that has emerged as a key player in strengthening halal supply chains across the continent.

With its deep-rooted Islamic heritage, cutting-edge certification processes, and collaborative approach, Bosnia is setting a new standard for halal integrity in Europe. This article explores Bosnia’s pivotal role in creating a robust halal supply chain, its collaborations with other halal-certified organizations, and why its efforts matter for businesses and consumers alike.

The Growing Demand for Halal Products in Europe

Europe is home to over 25 million Muslims, a number that is expected to grow in the coming years. This demographic shift has fueled a surge in demand for halal products, from food and beverages to cosmetics and pharmaceuticals. According to a report by Statista, the European halal food market alone is projected to reach $30 billion by 2025. However, meeting this demand is not without its challenges.

One of the biggest hurdles is ensuring the integrity of the halal supply chain. From farm to fork, every step of the process must adhere to strict halal standards. This includes sourcing halal-certified raw materials, using compliant processing methods, and maintaining transparency throughout the supply chain. For businesses, this requires a high level of coordination and expertise—something that Bosnia has mastered.

Bosnia’s Expertise in Halal Certification: A Foundation for Trust

Bosnia and Herzegovina has long been a leader in the global halal industry, thanks in large part to its Agency for Halal Quality Certification (AHQC). Established in 2007, the AHQC is renowned for its rigorous standards and transparent processes. But Bosnia’s contribution to the halal industry goes beyond certification; it plays a critical role in strengthening halal supply chains across Europe.

Here’s how Bosnia is making a difference:

  1. Setting Rigorous Standards: The AHQC’s certification process is one of the most stringent in the world. It covers every stage of production, from sourcing raw materials to packaging and distribution. This ensures that products bearing the Bosnia Halal Certification logo meet the highest standards of quality and compliance.
  2. Promoting Transparency: Transparency is at the heart of Bosnia’s approach to halal certification. The AHQC requires detailed documentation and conducts regular audits to ensure ongoing compliance. This level of transparency builds trust among consumers and businesses alike.
  3. Leveraging Technology: Bosnia is at the forefront of using technology to enhance halal supply chains. From blockchain to track and trace systems, the country is leveraging innovative solutions to ensure the integrity of halal products.

Collaborations: The Key to a Stronger Halal Supply Chain

Bosnia’s success in strengthening halal supply chains is not a solo effort. It is the result of strategic collaborations with other halal-certified organizations, businesses, and government bodies across Europe. These partnerships have been instrumental in creating a more reliable and transparent halal ecosystem.

  1. Partnerships with Halal-Certified Businesses: Bosnia works closely with businesses that are committed to halal integrity. By providing them with certification and guidance, the AHQC helps these companies navigate the complexities of the halal supply chain.
  2. Collaborations with International Halal Organizations: Bosnia is an active member of global halal organizations such as the AHAC – Association of halal Crttifiers. These collaborations ensure that Bosnia’s standards align with international best practices.
  3. Government Support: The Bosnian government has been a strong advocate for the halal industry, providing funding and support for initiatives that promote halal integrity. This has enabled the AHQC to expand its reach and impact.
  4. Educational Initiatives: Bosnia is also investing in education and training to raise awareness about halal standards. Through workshops, seminars, and publications, the AHQC is helping to build a more informed and skilled workforce.

Bosnia’s Impact on the European Halal Market

To understand the real-world impact of Bosnia’s efforts, let’s look at a case study. In 2020, a major European supermarket chain partnered with the AHQC to source halal-certified poultry products. The collaboration involved:

  • Sourcing: The AHQC worked with farmers and suppliers to ensure that the poultry was raised and processed in accordance with halal standards.
  • Certification: The AHQC certified the entire supply chain, from the farm to the supermarket shelf.
  • Transparency: The supermarket chain used blockchain technology to provide consumers with real-time information about the product’s journey.

The result? A 20% increase in sales of halal-certified poultry products within six months. This success story highlights the tangible benefits of Bosnia’s approach to halal supply chain management.

Why Bosnia’s Role Matters for Europe

Bosnia’s contributions to the halal industry have far-reaching implications for Europe. Here’s why:

  1. Consumer Confidence: By ensuring the integrity of halal supply chains, Bosnia is helping to build consumer confidence in halal-certified products. This is crucial in a market where trust is paramount.
  2. Economic Growth: The halal industry is a significant driver of economic growth. By strengthening halal supply chains, Bosnia is creating new opportunities for businesses and boosting the European economy.
  3. Cultural Integration: The halal industry plays a vital role in promoting cultural integration. By providing high-quality halal products, Bosnia is helping to meet the needs of Europe’s diverse population.
  4. Global Leadership: Bosnia’s expertise in halal certification and supply chain management positions it as a global leader in the industry. This not only enhances its reputation but also sets a benchmark for other countries to follow.

Challenges and the Way Forward

While Bosnia has made significant strides in strengthening halal supply chains, challenges remain. These include:

  • Standardization: Despite Bosnia’s efforts, there is still a lack of uniformity in halal standards across Europe. This can create confusion for businesses and consumers.
  • Fraud and Mislabeling: The rise of counterfeit halal products is a growing concern. Bosnia is addressing this issue through stricter regulations and advanced tracking technologies.
  • Awareness: Many consumers and businesses are still unaware of the importance of halal certification. Bosnia is tackling this through educational initiatives and outreach programs.

Looking ahead, Bosnia’s focus will be on fostering greater collaboration, leveraging technology, and raising awareness about halal standards. By doing so, it aims to create a more robust and transparent halal supply chain that benefits everyone.

Bosnia and Herzegovina has emerged as a beacon of reliability and transparency in the European halal industry. Through its rigorous standards, innovative solutions, and collaborative approach, the country is playing a pivotal role in strengthening halal supply chains across the continent. For businesses, this means access to a growing market and a trusted partner in halal certification. For consumers, it means peace of mind knowing that the products they purchase meet the highest standards of quality and authenticity.

As the demand for halal products continues to rise, Bosnia’s contributions will become even more significant. By setting a benchmark for integrity and excellence, Bosnia is not only shaping the future of the halal industry in Europe but also inspiring the world to follow suit.


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Yousef Khalawi Outlines Strategies to Shape the Future of the Global Halal Economy at MFH 25

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March 4, 2025

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Hafiz M. Ahmed

In a talk at the Makkah Halal Forum 2025 , H.E. Mr. Yousef Khalawi , Secretary General of the Islamic Chamber of Commerce and Development (ICCD), shared his vision for shaping the future of the global halal economy. The session, titled “Strategies Shaping the Future of Halal,” was moderated by Dr. Wael Eldesouki Bedda , Secretary General of the Saleh Kamel Sustainable Entrepreneurship & Enterprise Development Organization (SKSEED), and provided attendees with a roadmap for driving innovation, sustainability, and inclusivity in the rapidly growing halal sector.

During the 20-minute interview, Mr. Khalawi emphasized the transformative potential of the halal industry,He outlined key strategies to position the halal economy as a force for ethical trade, environmental stewardship, and cross-border collaboration.

“The halal economy is not just about compliance—it’s about creating value that benefits humanity and the planet,” Mr. Khalawi stated. He highlighted the importance of aligning halal practices with the United Nations Sustainable Development Goals (SDGs), ensuring that growth in the sector contributes to poverty alleviation, gender equality, and climate action.

One of the central themes of the discussion was the role of technology in advancing the halal ecosystem. Mr. Khalawi praised the integration of blockchain, artificial intelligence (AI), and e-commerce as tools to enhance transparency, traceability, and consumer trust.

“Digital solutions are revolutionizing the halal supply chain,” he explained. “From farm to fork, blockchain ensures that products meet halal standards at every stage, while AI optimizes resource use and reduces waste.”

He also called for greater investment in halal tech startups, urging governments and private sectors to support innovation in areas like halal pharmaceuticals, logistics, and fintech.

Mr. Khalawi underscored the critical role of small and medium enterprises (SMEs) and women entrepreneurs in driving the halal economy forward. “SMEs are the backbone of the halal industry, and women are its untapped potential,” he said.

He highlighted initiatives led by the ICCD to provide training, funding, and market access to SMEs, particularly in underserved regions. Similarly, he praised programs empowering women entrepreneurs, noting that their leadership is essential to fostering inclusivity and innovation.

The interview also addressed the need for harmonized global standards to facilitate trade and build consumer confidence. Mr. Khalawi stressed the importance of partnerships between international organizations, governments, and private sectors to overcome barriers such as certification inconsistencies and trade restrictions.

“Unified standards are the foundation of trust,” he asserted. “By working together, we can create a seamless halal ecosystem that benefits producers and consumers alike.”

Mr. Khalawi commended Saudi Arabia’s leadership in advancing the halal agenda, aligning with the Kingdom’s Vision 2030 goals. He noted that Makkah’s unique position as the spiritual heart of the Islamic world makes it an ideal hub for fostering collaboration and innovation in the halal sector.

“Makkah is not just a host—it is a symbol of unity and ethical leadership,” he said. “This forum is a testament to the Kingdom’s commitment to shaping the halal future.”

Concluding the session, Mr. Khalawi issued a call to action for stakeholders across the halal ecosystem. “We must move beyond dialogue and take concrete steps to implement these strategies,” he urged.

Hafiz Maqsood Ahmed is the Editor-in-Chief of The Halal Times.

Courtesy: the Halal Times


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BUSINESS & ECONOMY

Can Trump Halt the BRICS De-Dollarization Effort?

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February 23, 2025

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Timothy Hopper

Various efforts to reduce reliance on the US dollar in global trade are putting the future of this dominant currency under a spotlight. Donald Trump, the newly elected US president, has returned to the global economic stage with the same aggressive style and approach as before. This time, Trump has set his sights on the BRICS group, launching threats and criticisms from the outset. BRICS, composed of major economies such as Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE, is currently discussing the creation of a common currency that could challenge the dollar’s long-standing dominance in global trade.

Trump has responded to these moves with harsh rhetoric, threatening 100% tariffs and the complete exclusion of BRICS members from US markets should they continue to push for de-dollarization. Yet Trump’s remarks have drawn renewed global attention to the question of the dollar’s future.

Reacting to BRICS discussions about creating a rival currency or supporting the adoption of an alternative to the dollar—which would likely spell the end of the dollar’s dominance in global trade, a position it has held since World War II—Trump stated: “We urge these countries to abandon the idea of creating a rival currency or agreeing on an alternative to the dollar. Otherwise, they will face 100% tariffs, completely losing access to America’s unrivaled economic markets.” Recently, Trump also threatened to impose a 25% tariff on all imports from Canada and Mexico, along with an additional 10% tax on goods made in China.

On the surface, Trump’s tactics might seem like they could strengthen the dollar’s position; however, a deeper analysis suggests they will backfire. Instead of deterring BRICS countries, they might actually spur their efforts forward, with China in particular taking the lead to accelerate the de-dollarization process. Long suspicious of Washington’s use of the US dollar as a geopolitical tool, China has spent the last decade slowly building up alternative financial systems, for example by increasingly using the yuan for international trade settlement and expanding Beijing’s direct influence through the Belt and Road Initiative. The Chinese government has also diversified its foreign reserves, reducing its reliance on the US dollar in favor of gold and other currencies.

From this perspective, Trump’s statements are not a deterrent for BRICS countries but rather a rallying cry for urgent action. His persistent use of tariffs and sanctions as tools of economic diplomacy has not only deepened divisions between the United States and rival nations but also fueled distrust among US trading partners. This approach will undoubtedly drive other nations to seek alternatives to the dollar. China and Russia, as key targets of US sanctions and trade wars, are at the forefront of these changes, having signed agreements for trade in local currencies and deepened cooperation under the BRICS framework.

While the creation of a BRICS common currency or adoption of a US dollar alternative remains entangled in logistical and temporal challenges, the initiative symbolizes the bloc’s collective determination to build a financial system that is less reliant on the United States. Trump’s repeated threats may disrupt these efforts in the short term, but they will inevitably validate the concerns underlying these initiatives: the fear that the United States wields its economic power with little regard for long-term global financial stability, and solely in pursuit of its own unilateral interests.

For China, locked in strategic competition with the United States, shaping a new and favorable global order extends beyond economics. These initiatives are part of Beijing’s broader ambitions to establish itself as a global superpower. A multipolar financial system would reduce China’s and other BRICS countries’ vulnerability to US economic pressures, granting them greater freedom to pursue strategic goals on regional and global scales. For example, China’s digital yuan project is part of this vision, potentially serving as an alternative to dollar-based international payment systems, particularly in emerging markets.

Ultimately, the dollar’s dominance has been built primarily on trust—a belief that the United States will act as a responsible leader in the global economy and that dollar-based assets will remain stable and accessible. However, by weaponizing the dollar through sanctions and tariffs, Trump risks undermining this trust, not just among adversaries but also among allies. As this trust wanes, the dollar’s status as the world’s reserve currency is also weakened.

The paradox of Trump’s aggressive posture toward de-dollarization is that by favoring tariffs and sanctions, Trump is accelerating the very trends he seeks to combat. If he fails to change course, the world may soon find itself more united against Washington.

Courtesy: Geopolitical Monitor


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