Brydris

A New Economic Front Emerges
As the West continues to isolate sanctioned states, a quiet but profound shift is taking place. Countries like Afghanistan, Russia, Iran, and China are forging a new economic path—one that circumvents U.S.-led systems and undermines the dollar’s longstanding dominance in global trade. At the center of this transformation is Afghanistan, a nation once heavily reliant on U.S. aid, now recalibrating its alliances and strategies to survive a post-sanction economy.

Afghanistan and Russia Push for Local Currency Trade
Afghanistan’s acting Commerce Minister, Haji Nooruddin Azizi, revealed that Kabul and Moscow are in advanced discussions to settle trade transactions in local currencies. The two nations, both heavily sanctioned, aim to bypass the U.S. dollar in bilateral trade, a move that could see hundreds of millions of dollars exchanged annually in rubles and afghanis.

“Technical discussions are underway,” Azizi stated, with specialized teams from both sides exploring the financial frameworks needed for such a shift. This initiative follows Afghanistan’s growing trade ties with Russia, which currently sit at around $300 million annually, and is expected to rise substantially with increased imports of petroleum products and plastics.

China Enters the Fold
Parallel talks are also in progress with China, Afghanistan’s largest regional trading partner. Azizi confirmed that annual trade with China hovers around $1 billion, and efforts are being made to introduce similar local currency settlements in that relationship as well. A working group composed of officials from the Afghan Ministry of Commerce and the Chinese embassy is handling the discussions.

This is part of a wider trend as China, through its Belt and Road Initiative and expanding financial networks, plays a key role in building a non-Western economic framework. With U.S. sanctions limiting Afghanistan’s access to the global banking system, collaboration with China presents a critical economic lifeline.

Sanctions and Dollar Scarcity Drive Strategy
The backdrop of these economic maneuvers is a worsening dollar shortage in Afghanistan. Since the Taliban returned to power in 2021, billions of dollars in Western aid have been cut, particularly by the United States. This aid, often flown in as cash for humanitarian operations, once served as a vital source of U.S. dollars in the Afghan economy.

Now, with fewer dollars entering the country, Afghanistan faces a liquidity crisis. Though the afghani currency has remained relatively stable, economists warn that the situation is precarious. Azizi believes the government’s efforts to boost international investment, including outreach to the Afghan diaspora, will help safeguard currency stability and offset the declining dollar inflow.

De-Dollarization as a Global Trend
Afghanistan’s pivot mirrors a broader geopolitical shift. Russia, long wary of Western financial tools, is intensifying its campaign to de-dollarize its economy. In December 2024, President Vladimir Putin openly questioned the value of holding foreign currency reserves, which he said could be seized for political reasons. He advocated instead for domestic investment and bilateral trade in national currencies.

This sentiment is echoed across parts of the Global South, where countries like Iran, Brazil, India, and even Saudi Arabia are exploring alternatives to the dollar in global trade. Washington’s control over commodity markets, where transactions are largely dollar-based, has allowed it to enforce sanctions that limit access for producer nations like Venezuela and Iran.

A Parallel System is Taking Shape
What was once an economic periphery—isolated by sanctions and dismissed by Western institutions—is becoming a core of an emerging parallel trade system. These new alliances are not merely reactive but strategic, reshaping the rules of engagement in international commerce.

Whether this marks the beginning of the end of dollar dominance or simply a pushback that creates dual financial systems remains to be seen. But one thing is clear: Afghanistan, despite its isolation, is no longer a bystander—it is an active architect in this new economic architecture.