The Taliban-led government of Afghanistan is in advanced discussions with Russia and China to begin conducting trade in local currencies.
According to Afghan Commerce Minister Haji Nooruddin Azizi, in comments made to Reuters, the talks are in the “advanced stages.”
Reuters, quoting Azizi, stated that the talks are ongoing between Afghanistan’s Commerce Ministry and the Chinese Embassy in Kabul, who have been authorized by Beijing to conduct the talks.
Aziz did not specify who was handling the discussions from Moscow, though it is likely the Commerce Ministry is in communication with their direct counterparts in Russia over the matter.
China fully normalized relations with the Taliban government in late 2023, becoming the first country to formally accept a Taliban-appointed ambassador to Beijing. Russia, which recently removed the Taliban from its list of banned organizations, is reportedly preparing to do the same.
Afghanistan’s annual trade with China currently amounts to approximately $1 billion, while trade with Russia stands at around $300 million. Both figures are expected to rise significantly as new investments and energy agreements come into effect.
Since the Taliban regained power in 2021, Afghanistan has been cut off from the global banking system, placed under sanctions, and had its foreign assets frozen by Western countries. Like Russia, which has also faced sweeping sanctions, Afghanistan has turned to alternative financial mechanisms.
The proposed shift to local currencies is expected to benefit all three countries involved. For Afghanistan, it will expand trade opportunities with two of its largest trading partners. For Russia and China, it aligns with ongoing efforts to reduce reliance on the U.S. dollar—part of a broader de-dollarization strategy aimed at insulating their economies from Western sanctions.
If the plan moves forward, it may encourage other countries in the region to adopt similar practices, further integrating Afghanistan into the regional economy while bypassing the Western financial system. This could also help Kabul rebuild its war-torn economy and address ongoing humanitarian challenges.
The move would mark another blow to the dominance of the U.S. dollar, which has faced mounting pressure since 2022 as a growing number of nations seek alternatives to trading in the dollar, which puts more sectors of the worlds economies outside of the reach of Washington.