The G-7 summit in June took unprecedented actions to hand over billions of dollars in profits earned on frozen Russian assets to Ukraine, potentially undermining the legitimacy of the U.S.-dominated international financial system. This could lead to a shift away from a U.S. dollar-based global financial system and the creation of alternative renminbi-based financial systems. The G-7 leaders also indicated that new measures were being considered to restrict access to the international financial system for Chinese banks and entities, which could escalate the war and pose risks to the global financial system. The actions taken by the West against Russia and China carry risks for the global financial system and could provoke China. The G-7's warnings to China may deter Xi from further isolating China's economy or could lead to the beginning of the end of the postwar global economic system if Xi decides to move against Taiwan. The deep cross-integration between China and the West makes complete decoupling of economies unlikely. However, further sanctions could push Xi to set up an alternative renminbi-based financial trading system. The threat of financial mutual assured destruction between the West and China is significant, as both sides have significant assets at risk of possible sanctions. The West is more intertwined with China's economy than it was with Russia's, and seizing sovereign assets would have significant consequences. The latest moves might only spur Xi to further decouple China's economy and reduce vulnerabilities to sanctions. The intensified weaponization of Western currencies could boost China's yuan efforts and stimulate plans for a BRICS basket reserve currency. The West's actions against Russia and China could lead to a tipping point where many countries, even U.S. allies, move their assets away from the dollar and euro. The West's financial warfare against Russia and China carries risks for the global financial system and could have unintended consequences. [64f65e7b]