The seizing of Russian foreign reserves and eliminating access to SWIFT is leading Russia and other countries to reassess the role of dollars in global trade. Today, there are likely quite a few central bankers and heads of Treasury asking themselves- Dollars, Gold, or Rubles?

This article explores the problem vexing Russia and her trade partners. We explore how sanctions and the threat of sanctions may force some countries to contemplate weaning off the world's reserve currency.

Reserve Currency Status

The rule of law, economic and military might, and the most liquid capital markets are the principal reasons the dollar is the preferred currency for most global trade, as shown below. Because of its status and global acceptance, the U.S. dollar is considered the world's reserve currency. For more on the dollar's status, please read our article Triffin Warned Us.