In what is set to be a major blow to the U.S.’ increasingly fragile “petrodollar” system, Venezuela announced on Wednesday that it would no longer accept U.S. dollars as payment for its crude oil exports. According to the Wall Street Journal, Venezuela has begun using euros in lieu of the dollar and will convert existing cash holdings into euros as well.
However, the official website of Venezuela’s state oil company, PDVSA, has begun offering prices in the Chinese yuan, not euros. The decision is similar to that once made by former Iraqi leader Saddam Hussein, who dropped the dollar in favor of the euro a few years prior to the 2003 U.S. invasion of Iraq.
The move, though drastic, was not entirely unexpected. Venezuelan President Nicolás Maduro had stated earlier in the month that the country would look to “free” itself from the dollar within a week’s time, following the U.S.’ sanctions against the embattled nation.