MWE Correspondent
Financial analyst Philip Pilkington has argued that the Iran war could accelerate changes in the global financial system and hasten what he describes as the gradual decline of US financial hegemony.
Speaking about the changing international economic order, Pilkington said China and Russia appear to be taking a cautious approach, allowing existing developments to unfold rather than attempting to force a rapid transformation.
“The Chinese strategy, and Russia’s involved in that Chinese strategy at this point, is basically to just wait,” Pilkington said.
According to him, developments that might otherwise have taken years to unfold could now happen much faster as geopolitical tensions reshape economic relationships between major powers.
Pilkington suggested that without the Iran war, the restructuring of the international financial system might have progressed gradually over the next decade. He argued that the conflict has instead accelerated existing trends by several years.
“I think maybe we would have got, you know, a gradual unwind over the next maybe 10 years or something like that,” he said.
He further argued that a different approach by Washington could have slowed or redirected the process, including through the creation of a new multilateral financial arrangement based on a genuinely multipolar currency system.
However, Pilkington believes recent geopolitical developments have made such a gradual transition less likely, arguing that the Iran conflict has accelerated the movement toward an alternative global financial architecture.
He said China, Russia and other BRICS countries may have been surprised by the speed of these developments but are increasingly recognising the implications for the international financial system.
Pilkington also compared the current strategy of China and its partners to the ancient military principle associated with Sun Tzu: allowing an opponent to make mistakes rather than intervening unnecessarily.
“The correct strategic stance that they’re taking is just to step back a little bit and make sure you don’t get too involved,” he said.
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According to Pilkington, efforts to develop alternatives to the existing Western-led financial system have been underway among BRICS countries for years.
“Since 2022, arguably since 2014, since the Crimea incursion, the BRICS countries have been developing slowly, slowly, slowly an alternative architecture,” he said.
He argued that much of the infrastructure required for an alternative financial system may already exist and could potentially be activated quickly if countries gain sufficient confidence in it.
“The point here is everyone can just switch to the other system pretty much immediately,” Pilkington said, adding that the decisive factor would be whether countries trust the alternative system enough or lose confidence in the existing one.
His comments highlight a broader debate over the future of the international monetary system as emerging economies seek greater financial independence and explore mechanisms that could reduce reliance on Western-dominated institutions and currencies.
The US dollar remains the dominant currency in global trade, foreign-exchange reserves and international finance. However, China, Russia and other BRICS members have increasingly promoted greater use of national currencies in bilateral trade and supported efforts to strengthen financial cooperation outside traditional Western-led structures.
Pilkington’s argument is that the transition would ultimately depend less on the physical creation of a new system than on confidence in its institutions, contracts and financial markets.
“It’s all trust and contracts,” he said, suggesting that a major shift in global finance could occur rapidly if confidence in the existing system weakened significantly.
His remarks come amid continuing geopolitical tensions and growing discussions about whether the world is moving toward a more fragmented and multipolar financial order.
