SCO’s Weak Currencies Exposed: China-Led Bloc Can’t Replace the U.S. Dollar

By The Blogging Hounds A Hollow Challenge to Dollar DominanceThe Shanghai Cooperation Organization (SCO), the China-led bloc of 10 nations including Russia, India, Iran, and Pakistan, is holding its annual summit this week. Once again, SCO leaders are calling to “ditch the dollar.” But beneath the rhetoric lies a glaring reality: the SCO has no…

By The Blogging Hounds

A Hollow Challenge to Dollar Dominance
The Shanghai Cooperation Organization (SCO), the China-led bloc of 10 nations including Russia, India, Iran, and Pakistan, is holding its annual summit this week. Once again, SCO leaders are calling to “ditch the dollar.” But beneath the rhetoric lies a glaring reality: the SCO has no viable alternative to the U.S. dollar as a global reserve or trade currency.

Why SCO Currencies Fail
The SCO’s ten member currencies—Belarusian ruble, yuan, rupee, Pakistani rupee, Russian ruble, Tajikistani somoni, Uzbekistani som, and others—are either weak, nonconvertible, or tightly controlled. Even the yuan and rupee, often described as partially convertible, remain restricted by state management. Exchange rates to the dollar illustrate the imbalance: Belarusian ruble 3.37, yuan 7.13, rupee 87.95, Pakistani rupee 283.37, Russian ruble 80.58, Tajikistani somoni 9.52, Uzbekistani som 12,477. These currencies lack the trust, stability, and international usability that make the U.S. dollar and euro dominant.

Four Proposals, Four Failures
SCO nations have floated four main proposals to bypass the dollar: a monetary union, a currency basket, a peg to a stable asset, and currency swaps. None of them are feasible.

Monetary Union: A euro-style union is impossible. Member economies vary drastically in GDP, inflation, debt, and fiscal discipline. China and India dominate, while Tajikistan and Kyrgyzstan lag far behind. Historical precedent shows that building a successful currency union takes decades—time the SCO simply doesn’t have.
Currency Basket: A basket of SCO currencies would inherit all the weaknesses of its components. With most currencies nonconvertible, volatile, and mistrusted, liquidity is nonexistent. Disputes over weighting and Chinese dominance further undermine any chance of success.
Peg to a Stable Asset: Pegging to the dollar, euro, or gold defeats the purpose. It ties the bloc to the very system they seek to replace, while gold pegs require reserves that are impossible to maintain, especially for smaller members.
Currency Swaps: Bilateral or multilateral swaps appear workable in theory but collapse in practice. Stronger economies like China and India would be forced to hold weaker, depreciating currencies, while sanctions and political mistrust make swaps impractical on a large scale.

Structural Flaws Cannot Be Overcome
Even if the SCO could implement swaps or a basket system, global trade in oil, commodities, and reserves remains dollar-dominated. A Development Bank or clearing mechanism is stalled indefinitely. The SCO’s currencies are simply too weak, restricted, and distrusted. De-dollarization talk is little more than posturing.

The Global Dollar Remains Supreme
The U.S. dollar continues to dominate because it is fully convertible, backed by strong institutions, and widely trusted across the globe. Despite SCO and BRICS rhetoric, reality proves that no rival currency can match the dollar’s reach or reliability.

The bottom line: until the SCO nations solve decades of economic, political, and institutional weakness, the dream of a post-dollar world remains just that—a dream.

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