On Tuesday, Russian President Vladimir Putin said the US and other Western currencies would inevitably lose their global reserve status for use in international trade settlement.

In his annual address to the Russian Federal Assembly, President Putin said that Moscow was working with the nation’s allies to to create a new system of international trade settlements which would not involve the US dollar or the euro.

Putin noted, the current political actions of the ‘Western states, weaponizing their financial systems, were driving foreign nations to question their continued reliance on financial systems controlled by the West, and easily turned against nations which did not capitulate to Western political demands. At present this was manifesting in nations increasingly seeking out ways to bypass the Western financial systems, and reduce their dependence on the dollar and the euro.

He explained that Western sanctions on Russia have only forced it to eliminate its use of dollars and other Western currencies, without preventing it from engaging in international trade.

Putin cited the fact that since the beginning of 2020, the share of ruble transactions in Russia’s foreign trade had doubled. Now, one third of the nation’s settlements were performed in rubles. He went on to observe that inevitably, the use of national currencies in place of the US dollar and euro, in trade settlements with Russia’s international partners would expand.

Russia began its move away from Western methods of trade settlement back in 2014, after Western nations imposed the first wave of economic sanctions against Russia, imposed for reunifying Crimea with Russia following the overthrow of Ukraine’s elected government. As sanctions attempted to cut Russia off from Western financial systems, Russia began developing its own financial systems to replace them.

A new wave of sanctions imposed since the latest military actions in Ukraine have only sped up the process, as Western nations froze $300 billion in Russian foreign exchange reserves. It furthermore spurred other nations not specifically aligned with the West to begin exploring alternative means of trade settlements for their own use in the event their political interests ever lead them to find themselves at odds with the Western alliance and cut off from its financial systems.