De-dollarisation, the move away from the U.S. dollar in global trade and finance, is no longer a fringe idea. As geopolitical tensions rise and new financial tools emerge, could this shift really transform the global economy?
What is de-dollarisation?
De-dollarisation refers to the process by which countries reduce their reliance on the U.S. dollar in global trade, finance, and foreign reserves. This can take many forms — from conducting trade in local currencies, to building up gold reserves, to developing alternative financial infrastructures.
Though the U.S. dollar still accounts for nearly 60% of global reserves and 88% of foreign exchange transactions, cracks in its dominance are appearing. The push for alternatives is no longer a fringe idea, it is now a policy objective for major economies such as China, Russia, and members of the BRICS bloc.
Why is the world rethinking the dollar?
There are several key reasons:
1. Geopolitical risk
The U.S. has used the dollar as a tool of power, from imposing sanctions to freezing reserves. While effective, this has raised alarm bells in countries wary of Washington’s influence, prompting them to seek financial autonomy.
2. Economic overdependence
Holding dollars or trading only in dollars makes countries vulnerable to U.S. monetary policy, inflation, and interest rate shocks. Diversifying currencies offers more control and stability.
3. Emerging powers
Nations such as China and India are asserting themselves on the world stage and want their currencies to play a greater role. China’s yuan is increasingly used in bilateral trade and has even become a payment option for Russian energy exports.
4. Digital disruption
Central bank digital currencies (CBDCs) and blockchain platforms are emerging as potential challengers to traditional dollar-based payment systems. Initiatives such as BRICS Pay and China's digital yuan are early signals of change.
Where is de-dollarisation already happening?
Trade: Russia now sells oil to India and China in local currencies. China’s Belt and Road Initiative is increasingly settled in yuan.
Reserves: Emerging market central banks — from Türkiye to Brazil — are stockpiling gold and reducing their dollar reserves.
Debt: The share of U.S. Treasuries held by foreign investors is down to 30%, from more than 50% in the aftermath of the 2008 crisis.
Commodities: Some oil, coal, and gas trades are now priced in non-dollar currencies, challenging the petrodollar system that has long underpinned U.S. strength.
Could de-dollarisation collapse the dollar?
Not overnight. The dollar still dominates because of its deep liquidity, trusted legal system, and the sheer size of the U.S. economy. No other currency, not even the euro or yuan, yet offers the same combination of scale, stability, and global trust.
But the shift may not be about replacing the dollar, rather, it's about reducing overreliance on it. A multipolar currency world could emerge, where several strong regional currencies coexist, reshaping financial flows, risk management, and geopolitical leverage.
What would a post-dollar world look like?
Final thoughts
De-dollarisation isn’t a doomsday scenario, but it is a significant recalibration of global financial power. The dollar’s reign is unlikely to end soon, but its grip is loosening as countries hedge their bets in an uncertain world.
As J.P. Morgan strategist Luis Oganes puts it:
“The world has become long on the dollar in recent years. But as U.S. exceptionalism erodes, so might the overhang in USD dominance.”
In other words, the age of dollar supremacy may not be over, but the age of dollar exceptionalism may be.
The ceasefire between Israel and Lebanon will be lengthened by three weeks, U.S. President Donald Trump said in a post on social media website...
Georgia is entering a pivotal economic and geopolitical phase, as talks with China to expand a free trade agreement coincide with renewed progress ...
Slovenia’s national broadcaster RTV Slovenia has confirmed it will not air the Eurovision Song Contest 2026, joining a widening boycott over ...
The European Union has introduced new trade restrictions on Kyrgyzstan under its 20th sanctions package against Russia, marking the first time a Ce...
The prospect of a lasting peace between Azerbaijan and Armenia has gained renewed significance as Armenia approaches a pre-election period marked b...
The ceasefire between Israel and Lebanon will be lengthened by three weeks, U.S. President Donald Trump said in a post on social media website Truth Social early on Friday (24 April), while stating in a separate earlier post that he was in no rush to make a deal with Iran.
Georgia is entering a pivotal economic and geopolitical phase, as talks with China to expand a free trade agreement coincide with renewed progress on the Anaklia Deep Sea Port.
Slovenia’s national broadcaster RTV Slovenia has confirmed it will not air the Eurovision Song Contest 2026, joining a widening boycott over Israel’s participation.
The prospect of a lasting peace between Azerbaijan and Armenia has gained renewed significance as Armenia approaches a pre-election period marked by relative stability.
The U.S. military has intercepted at least three Iranian-flagged tankers in Asian waters and is redirecting them away from their positions near India, Malaysia and Sri Lanka, shipping and security sources said on Wednesday, exclusively to Reuters.
Iran’s Revolutionary Guards targeted three vessels, seizing two of them for alleged maritime violations and transferring them to Iranian shores, as U.S. President Donald Trump said Washington is extending its ceasefire with Iran until Tehran submits a proposal.
Two local trains collided head-on north of Copenhagen on Thursday (23 April), injuring 17 people, five of them critically, according to emergency services.
The U.S. military is redirecting at least three Iranian-flagged tankers after intercepting them in Asian waters near India, Malaysia and Sri Lanka, shipping and security sources said on Wednesday. Meanwhile, Tehran said U.S. breaches, blockades and threats are undermining “genuine negotiations.”
The European Union is preparing its 20th round of sanctions against Russia over the war in Ukraine. The measures are close to being approved, after earlier delays linked to energy concerns in Slovakia and Hungary eased following repairs to the Druzhba oil pipeline.
Meta Platforms will cut about 10% of its global workforce from 20 May, marking the start of a wider restructuring as the company increases spending on artificial intelligence (AI) and plans further layoffs later this year, according to sources familiar with the matter.
President Donald Trump has warned that the U.S. could impose "big" tariffs on British goods if the UK does not remove its digital services tax. Speaking to reporters at the White House on Thursday, Trump said Washington was ready to act in response to the levy on major American technology firms.
China's domestic automakers have a message for the boardrooms of premium German brands such as Porsche, Mercedes-Benz, and BMW: We are coming for your customers, and we are armed with superior technology at a fraction of the cost.
Tim Cook, the tech boss who led Apple to become a $4 trillion company in its post-Steve Jobs era, is stepping down after 15 years in the top job. John Ternus, an Apple veteran of 25 years, who is currently the U.S. company’s Vice President of Hardware Engineering, will take over from September.
Netflix shares fell sharply on Friday after the streaming group issued a weaker-than-expected outlook and said chairman and co-founder Reed Hastings will step down from the board.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment