The U.S. dollar has long held an outsized role in global trade, finance, and reserves, a status cemented after World War II and amplified by the petrodollar arrangements of the 1970s. Under the Bretton Woods system (1944–1971), the dollar was pegged to gold and became the linchpin of international finance. After President Nixon ended dollar–gold convertibility in 1971, the United States struck agreements with oil-exporting nations (notably Saudi Arabia) to price oil in dollars and reinvest oil revenues in U.S. assets. These arrangements entrenched the dollar’s global dominance: by 2023, roughly 80% of world oil transactions were still priced in dollars. The result was a self-reinforcing cycle – foreign exporters accumulated “petrodollars” (USD from oil sales) and invested them back into U.S. Treasuries and goods, keeping U.S. interest rates low and dollar demand high. In short, the dollar became the default unit of account, medium of exchange, and store of value for most cross-border trade and finance.
Over the past decade, however, cracks have appeared in dollar supremacy. Central banks have gradually reduced the dollar’s share of foreign exchange reserves: IMF data show the U.S. share fell from about 71% in 1999 to 59% by Q4 2020, a 25-year low. Some of this decline reflects valuation effects, but after adjusting for exchange-rate moves the downward trend remains. Importantly, the decline has not been matched by a surge in the euro or yen; instead, a range of smaller currencies (Canadian, Australian, Chinese renminbi, Korean won, etc.) have gained footholds as “nontraditional” reserve currencies. Even so, the dollar is still dominant – the IMF notes that around 57–58% of allocated reserves remain in USD – and for now there is no single alternative currency of equal stature.
Yet a convergence of geopolitical and economic pressures is motivating many Global South countries to shift away from dollar dependence. Recurring U.S. sanctions (on Russia, Iran, Venezuela, etc.) have taught emerging-market governments that holding or transacting in dollars exposes them to risk of financial exclusion. At the same time, U.S. policy actions — such as aggressive Federal Reserve rate hikes and unpredictable sanctions — have fueled volatility and inflation in developing economies. As one analyst puts it, geopolitical tensions and harsh sanctions have led “more and more countries [to] develop alternative cross-border payment mechanisms to reduce their reliance on the U.S. dollar (USD)”. Central bankers in Asia, Africa, and Latin America cite “wild swings” in capital flows from Fed policy and the specter of “third-party” sanctions as key drivers of change.
From Bretton Woods to Petrodollars: History of Dollar Dominance
In the aftermath of World War II, the United States emerged with the world’s largest economy and vast gold reserves. The 1944 Bretton Woods agreement fixed other currencies to the dollar (itself convertible to gold at $35/oz), making the dollar the linchpin of international finance. This system persisted until 1971, when mounting U.S. deficits forced President Nixon to suspend dollar–gold convertibility. As one financial historian explains, Bretton Woods “collapsed in 1971 because the global economy and its demand for safe assets outgrew the available supply of bullion”.
To stabilize the dollar after 1971, Washington cultivated a new era of dollar-based agreements, especially in oil markets. Beginning in 1974, the U.S. struck a “petrodollar” pact with Saudi Arabia and other OPEC producers: they would price their oil in dollars and reinvest surplus dollars in U.S. Treasury bonds and goods. The strategy paid off: foreign oil exporters kept supplying oil while the U.S. enjoyed steady demand for its currency and Treasuries. The result extended dollar dominance for decades. As the Investopedia analysis notes, “the petrodollar system has long supported U.S. economic strength by tying global oil trade to the U.S. dollar, keeping demand for the currency and Treasury securities high”.
The petrodollar era also reshaped global power. The flow of dollar revenues into Middle East and other oil-exporting states funded development projects, arms purchases, and investments worldwide. In effect, the U.S. had to share political and economic influence with oil suppliers who now had a vested interest in the dollar’s stability. Nonetheless, the dollar became entrenched in the global energy and trade architecture. Indeed, as of 2023 roughly four-fifths of oil deals were still denominated in dollars.
The Dollar’s Global Footprint in Trade and Finance
Beyond oil, the dollar’s dominance permeates all corners of global finance. BIS analysis highlights that the U.S. dollar “occupies the top position in all markets” – from international banking to foreign exchange to bond markets – largely due to its use as an offshore unit of account. Even countries that do not use dollars domestically tend to price exports, import bills, and debt obligations in dollars. Economists note that in many emerging markets “the dollar is more stable and more commonly accepted as a medium of payment in cross-border trade than the local currency”. A Carnegie study points out that exports and imports of commodities from emerging markets are “often priced in dollars,” and that a large share of these countries’ external debt is dollar-denominated.
Empirical data confirm this outsized role. In the late 20th and early 21st centuries, about 60–70% of global exports were invoiced in USD, far above the U.S. share of world GDP. More recently, while precise figures vary, the dollar still dominates foreign reserves (about 57–59% of allocated reserves as of 2022–24) and transactions. For example, an IMF blog notes central banks’ allocations: “the share of U.S. dollar reserves held by central banks fell to 59% —its lowest level in 25 years—during Q4 2020”. Even with such declines, the authors caution that “despite major structural shifts… the US dollar remains the dominant international reserve currency”.
The BIS concurs: tracking the “currency dimension” of global markets, it finds that USD bonds account for the bulk of international bond issuance, and the dollar serves as the dominant vehicle currency in foreign exchange trades. Offshore banking and derivatives positions likewise skew heavily toward the dollar. In short, dollar-centric networks and market depth create strong network effects: firms and governments worldwide find it easiest to borrow, lend, and trade in the currency that everyone else uses. This “network effect” means even countries with stable economies and own currencies (e.g. Brazil, India) conduct much of their external business via the dollar.
Why the Global South Is Looking Beyond the Dollar
Sanctions and Geo-Economic Pushback. U.S. use of the dollar as a tool of sanctions has alarmed many countries. Faced with the risk of being cut off from dollar-based systems like SWIFT, governments now perceive dollar-centrism as a vulnerability. The IMF and analysts note that recent “sweeping sanctions against Russia” and others have forced nations to reconsider their reliance on dollar-based channels. For instance, ASEAN finance leaders explicitly point out that Western sanctions on Russia (freezing $300 billion of assets, banning SWIFT access) prompted member states to diversify away from the dollar out of caution.
Policy-makers in Asia and Africa echo this sentiment. A report from the Atlantic Council notes that growing discontent in the Global South with U.S. policies — Fed tightening and weaponized finance — has fueled the search for alternatives. By expanding local-currency swap lines and payment systems, countries aim to “de-risk” themselves from U.S. sanctions and dollar volatility. In practice, this means seeking payment arrangements where they can settle trade without touching dollars, thus insulating themselves from unilateral U.S. financial power.
U.S. Monetary Policy Volatility. The Federal Reserve’s post-2021 interest rate hikes have had profound spillovers abroad. Emerging markets, which built up large dollar debts during the era of ultra-low global rates, suddenly found their own currencies collapsing and borrowing costs soaring. Many developing central banks had to raise domestic rates sharply to stem capital flight and inflation – a painful process that exposed the downsides of dollar-denominated exposure. For example, an ASEAN Briefing article notes that when the Fed “embarked on its aggressive interest rate hike strategy,” developing-country central banks were “forced to raise their own interest rates to stem the sharp depreciation in their currencies.”. Such currency stress has increased interest in paying trade in native currencies or major trading-partner currencies (yen, euro, yuan) instead of the dollar.
Global South Assertion and Multipolarity. Beyond immediate shocks, there is a broader geopolitical narrative: emerging powers and developing nations want a more multipolar financial system. BRICS leaders have long advocated reducing “dollar dominance” and strengthening local currency usage. Invitations in 2023 to countries like Iran, Saudi Arabia, and the UAE to join BRICS underscore that group’s push for an alternative payment architecture. While analysts caution that a full-fledged BRICS single currency is distant and challenging, the symbolic shift is clear: major southern economies are encouraging regional payment networks, swap lines, and an expanded role for currencies like the Chinese yuan. Such moves reflect strategic desires to create financial buffers and gain bargaining power, whether vis-à-vis Beijing or Washington.
Global South’s Shift in Practice
Countries across Latin America, Africa, Asia, and the Middle East are experimenting with concrete steps to trade and invest with fewer dollars. These efforts span official swaps, regional payment systems, and new currency arrangements.
- Latin America – Brazil and Argentina. In early 2023, Brazil and Argentina announced plans for a joint currency unit to settle bilateral trade, explicitly aiming to reduce reliance on the dollar. This “common unit of account” would sit alongside the Brazilian real and Argentine peso and be used in clearing houses for trade payments. Such a mechanism would, for example, let Argentine exporters receive payment in this shared unit instead of dollars – important for Argentina as it struggles with low FX reserves. Trade analysts note that this arrangement is far from a full currency union; it’s targeted narrowly at trade settlements, and the actual currencies (real, peso) would still circulate domestically. Nonetheless, by “trimming reliance on the dollar,” it signals a willingness to find regional solutions. The Brazilian finance minister even floated linking the new unit to digital stablecoins pegged to commodities or major currencies.
- Latin America – Other Moves. Beyond the Brazil-Argentina deal, other Latin nations have pursued local-currency trade. For example, South American trade bodies have discussed invoicing in reais, pesos, or bolivars for intra-regional commerce. Mexico and Argentina have exchanged currency swap lines, and Venezuela has accepted yuan and euro for oil to circumvent U.S. sanctions. These are piecemeal, but collectively they reflect frustration with U.S. “weaponized” currency use.
- Asia – China and Trading Partners. China leads efforts to internationalize its currency. The People’s Bank of China has signed 41 bilateral swap agreements with other central banks (totaling RMB 3.5 trillion, ≈US$480 billion). These swaps provide local-currency liquidity: Chinese importers can obtain foreign currency and foreign partners can get RMB to pay for Chinese goods. As a result, China now settles about half of its cross-border trade and investment in RMB – surpassing the dollar within those transactions. For many of China’s trading partners, RMB usage has jumped. The IMF found that among 125 sample economies, the median share of RMB in cross-border payments with China rose from 0% in 2014 to 20% by 2021 (and 70% for the top quartile). Importantly, some of this use is bilateral (China vs. one partner), but there are early signs of “third-party” use: India began using RMB to pay for Russian oil, and Argentina paid part of its IMF dues in yuan.
- Asia – ASEAN Regional Initiatives. The ASEAN bloc has formally committed to using more local currencies. In May 2023, ASEAN members signed an agreement to improve regional payment connectivity and boost local-currency transactions (LCT). The goal is to increase intra-ASEAN trade in pesos, ringgit, baht, etc., rather than routing everything through dollars. This initiative is partly defensive: ASEAN nations fear being caught up by Western sanctions (e.g. on Russia) and noted that blockades of dollar transactions create urgency to diversify. Already, some ASEAN central banks have launched shared payment platforms. For instance, QR-code systems now link Thailand’s baht to Indonesia’s rupiah and other currencies, so purchases can be paid by direct rupiah–baht exchange without a dollar intermediary. When fully connected, such systems will allow a shopper in one country to pay with that country’s money for goods in a neighbor, with settlement bypassing the dollar. ASEAN officials stress that the dollar remains dominant (over 58% of reserves as of late 2022), but aim to deepen regional financial ties for resilience.
- Asia – India and Russia. India and Russia have moved to settle more trade in rupees and rubles, partly driven by sanctions. Reports indicate that a growing share of India–Russia trade (especially energy imports) is now in rubles or rupees. One analysis by the “China-Global South Project” notes that India and Russia are using the yuan for oil payments, reflecting new infrastructure for non-dollar trade. (Public reports suggest India allows RMB payments to Russia for oil, though official data is scarce.) These shifts align with broader BRICS efforts: at the 2023 summit, BRICS countries explicitly discussed using local currencies for inter-BRICS trade.
- Middle East – Gulf Cooperation Council. The Gulf states are also flirting with de-dollarization. China and Saudi Arabia have discussed pricing a portion of Saudi oil in yuan, and Iran long ago accepted euros/yuan for its oil to evade U.S. sanctions. Similarly, Turkey and the UAE signed currency-swap accords in 2022, enabling trade in lira-dirham instead of dollars (Turkey’s central bank cited “deepening financial cooperation” as motivation). Though the petrodollar is still entrenched, a gradual “petroyuan” trend is visible: a South China Morning Post report highlights that China’s digital currency initiatives are helping to boost yuan settlements in crude trade, and that oil producers are increasingly given “viable and potentially superior alternatives” to USD clearing.
- Africa – China-Africa Swaps and Payments. African countries have signed bilateral swaps to get around dollar shortages. For example, Nigeria extended a 15 billion yuan (US$2 billion) swap with China in late 2024. The agreement provides Nigerian naira for Chinese businesses (and yuan for Nigerians), reducing Nigeria’s need for dollars in bilateral trade. This was explicitly to alleviate “dollar shortages” after Nigeria freed the naira’s exchange rate. Kenya, Ethiopia, and others have also inked RMB swaps with China. Outside China’s sphere, South Africa’s BRICS-oriented New Development Bank (NDB) is mobilizing local currency funds: by 2023 it issued 13 billion RMB in “panda” bonds and hopes to raise rands and rupees through bonds. The NDB’s CFO reports growing emphasis on local-currency lending (projected to reach 30% of loans by 2026) to “de-risk” against FX fluctuations, even as dollars remain its primary funding.
- Africa – Regional Proposals. African leaders have called for an African common currency or greater use of regional units, though progress is slow. Meanwhile, individual states like Egypt and Angola are diversifying reserves by accumulating euros, yuan, and gold. Some regional development bodies (African Union, ECOWAS) have studied using local-currency systems, but concrete implementation remains at an early stage.
These examples illustrate a clear pattern: Global South economies are experimenting with currency swap lines, local currency trade agreements, and regional payment platforms to reduce transactional reliance on the dollar. As one Atlantic Council summary puts it, “pairs of countries have agreed to settle cross-border trade and investment transactions… in their local currencies, facilitated by bilateral currency swap lines”. Such bilateral arrangements are proliferating from Asia to Africa to Latin America, often underpinned by central bank cooperation or new payment rail projects.
Alternative Arrangements and Financial Innovations
In response to this shift, a range of alternative mechanisms are gaining traction:
- Local-Currency Trade and Swap Lines. Many countries now have formal swap lines with partners. China alone has ~41 such agreements (Brazil, Russia, India, Pakistan, Turkey, multiple African countries, etc.) to support RMB trade settlements. ASEAN countries have an intra-ASEAN liquidity network to use local currencies for ASEAN trades. These swaps function as emergency credit lines: e.g., if India needs yuan to pay Chinese importers, a rupiah–yuan swap line can supply it. Such lines boost confidence that exporters can get payment without going through dollars.
- Regional and Bilateral Payment Systems. Beyond swaps, countries are building payment platforms that bypass SWIFT. China’s Cross-Border Interbank Payment System (CIPS) is an RMB-centric alternative to SWIFT, and SWIFT itself is exploring how to route transactions through local nodes. The BIS’s mBridge project (China, Thailand, UAE, Hong Kong) is developing a multi-CBDC settlement network, aiming to settle cross-border payments in central bank digital currencies. In Southeast Asia, the ASEAN Quick Response (QR) code system connects e-payment apps, so local e-money can be exchanged directly (e.g. a Thai buyer using a Malaysian bank’s app pays in ringgit–baht via QR, sidestepping USD). There are also nascent efforts like Africa’s regional payment gateway under Afreximbank or Latin America’s agreements.
- Alternative Reserve Assets – Gold and Others. Facing the risk of sanctioned currencies being frozen, some central banks are building gold reserves. IMF researchers have found that when countries fear their FX might be targeted, they modestly shift reserves into gold. Indeed, many emerging central banks (China, India, Turkey, Poland, etc.) have been net gold buyers in recent years as a non-sanctionable asset. Other proposals include using existing SDRs (IMF’s special drawing rights, which are a basket of major currencies) more widely as a neutral reserve asset. South Africa’s NDB is also considering gold-backed bonds as a local-currency instrument. No gold-standard is imminent, but gold is seen as insurance.
- New Currencies and Currency Baskets. The idea of a common “south” currency or a BRICS basket has surfaced periodically. For now, these remain mostly theoretical or political statements. Analysts (e.g. via Fortune) warn that a single BRICS currency is “ridiculous” without deep coordination (former economist Jim O’Neill quipped that China and India would have to fully ally). However, smaller scope proposals – like the Brazil-Argentina trade unit mentioned above – are underway. Some countries also hold fast to proposals for sovereign currency coins or use digital stablecoins pegged to a basket of metals and currencies (as Brazil’s finance officials have mentioned). These remain exploratory, but they underline that alternatives are being discussed at policy levels.
- Central Bank Digital Currencies (CBDCs). Many developing countries are exploring CBDCs, which could in theory facilitate cross-border local currency payments. For example, Nigeria’s eNaira, India’s Digital Rupee (in pilot), and e-Brazil (Digital Real) could one day enable seamless local-currency transfers. A BIS survey notes that countries like the Bahamas, Nigeria, and Jamaica have launched CBDCs partly to broaden payment access and “help reduce dollarization”. While technical hurdles remain, digital currencies may in future ease direct bilateral payments without converting through dollars.
Together, these innovations are fragmenting the traditional dollar-dominated payment landscape. The IMF has warned that a multitude of patchwork systems “do not constitute a threat to the dollar’s premier position”, since no single alternative currency is fully global. But they do create real costs. Fragmentation raises transaction inefficiencies (firms may need multiple banking channels) and new sources of systemic risk (less integrated markets can be volatile). The long-term impact depends on whether these alternatives scale significantly.
Data Trends: Evidence of Shifting Currency Patterns
Empirical evidence on de-dollarization is mixed and evolving. Reserve data show a gradual shift but not a collapse of dollar holdings. For example, the IMF’s COFER database indicates the dollar’s share fell to about 57–59% by early 2025. Critically, however, IMF analysts stress that when adjusting for recent exchange rate swings, the dollar’s share actually held steady in Q2 2025. In other words, apparent large changes are often “valuation effects” as the euro or yen strengthen, not necessarily active selling of dollars. Over decades the underlying trend has been slow: dollar share has declined by only ~12 percentage points since 1999, reflecting mostly gradual central bank diversification.
In trade invoicing and payments, the data are even sketchier. There is no official global tally of currency usage in private contracts. BIS studies suggest the dollar still dominates invoicing for most commodities and even many emerging-market trades. However, various proxies hint at change: for instance, between 2014 and 2021 a BIS-based sample showed RMB’s share in China’s trade payments rising dramatically, even if RMB’s overall global share is still small. In oil specifically, analytics firms (and media reports) indicate rising yuan usage: one report quotes a senior economist saying “the petrodollar’s decline in the Gulf isn’t a question of if, but when”. China’s launch of oil contracts priced in yuan (a “petroyuan”) in 2018 and digital yuan pilots for commodity trading suggest a strategic push toward alternative pricing.
Regional data mirror these narratives. ASEAN trade increasingly uses local currency arrangements: 7% of global GDP and growing, ASEAN economies now clear some payments via ringgit-baht rupee systems. In Latin America, surveys show Brazilian and Argentine exporters willing to price intra-regional sales in reals/pesos, especially in agriculture. In Africa, though long-dollarized, official statistics note some import bills to Asia are now in euros or yuan. The Chinese and Nigerian swap mentioned provides quantitative relief: their bilateral trade (≈$13.6bn in 2023) will see more flows in yuan/naira instead of USD. African central banks also report accumulating yuan in their reserves (South Africa and Zambia have RMB bonds, for example).
We must note, however, that much of this is emerging and uneven. Comprehensive global stats are lacking, so analyses rely on spot data and surveys. For every case of dollar avoidance, there are many trillions of trade and investment still conducted via dollars. Indeed, leading financial institutions (Goldman Sachs, JP Morgan, BIS) caution that de-dollarization is a gradual process. As one economist put it, even if some countries “seek further diversification… a large share of public and private debt in these economies is dollar denominated” making quick change difficult. The IMF similarly finds the dollar “continues to cede ground to nontraditional currencies… but it remains the preeminent reserve currency”.
Global Implications: Risks and Opportunities
A shift towards a multipolar currency world would have far-reaching consequences. For the United States, reduced dollar dominance could mean higher borrowing costs and less “exorbitant privilege.” If demand for Treasury bonds falls, U.S. interest rates might rise or fiscal deficits become harder to finance. As Investopedia notes, if oil exporters or others accept other currencies, it “could weaken demand for the U.S. dollar and undermine its status”. More immediately, a weaker global usage of USD would diminish America’s leverage in geopolitics, since dollar-linked sanctions become less effective.
For the global economy, a less dollar-centric system has mixed effects. On one hand, it could reduce volatility for some countries. Countries that invoice in their own currency or have swap lines are less exposed to sudden dollar surges. Use of regional currencies could insulate neighbors from U.S. policy shocks. For example, ASEAN members using ringgit–baht trades might feel less collateral damage from Fed hikes. Similarly, commodity exporters getting paid in euros or yuan avoid dollar swings.
On the other hand, currency fragmentation can raise transaction costs and systemic risks. Multiple clearing systems may not interoperate well. A study cited by the Atlantic Council warns that proliferation of local-currency arrangements “creates substantial costs in terms of lost economic efficiency and risks to financial stability”. For instance, if Russia pays China in rubles and China pays Angola in yuan, chains of third-party conversion become complex. Moreover, if trust erodes in U.S. assets, capital flows might become more cyclical and crises more frequent, unless viable anchors emerge.
Geopolitically, a decline in dollar hegemony could accelerate the emergence of blocs. Financial and trade blocs using different systems might form: a dollar-based “Western bloc” and a Eurasian or Asian bloc using other standards. Some fear this could mirror 20th-century currency blocs, with fragmented spheres of influence. Others see opportunity: reduced dollar dependency might level the playing field, giving Global South countries more autonomy in trade pricing and reserve management. Development institutions argue that spreading reserve assets (including gold or SDRs) could make the international system more stable in the long run, even if transition is bumpy.
Finally, U.S. policymakers are aware of the risks. The U.S. Treasury has published papers on the dollar’s role and occasionally reaffirmed support for the petrodollar. IMF and World Bank officials, aware of rising discontent, emphasize dialogue: for example, they point out that even if some countries de-risk from dollars, any “changes to the US dollar’s status are likely to emerge in the long run”. Nonetheless, the trend is undeniable enough that economists like Barry Eichengreen and external commentators caution that the era of uncontested dollar supremacy may be waning.
Perspectives from Economists and Policymakers
Analysts and officials offer varied views on this evolution. Some see it as strategic backlash: countries under sanctions or pressure are retaliating by shifting currency policy. Others frame it as a rational response to U.S. macro policy. For instance, Vietnam’s central bank governor (and others in ASEAN) have noted the destabilizing impact of Fed policy changes on their economies, prompting exploration of local alternatives.
Regional development bodies also weigh in. An ASEAN finance minister explicitly linked their local-currency push to sanctions fears and dollar volatility. The BRICS New Development Bank’s leadership argues for more local currency bonds to shield its projects from U.S. financial risk, even as they admit practical limits (the NDB’s CFO warns you can’t completely “step outside of the dollar universe”). Economists at institutions like the IMF acknowledge the shift: IMF research has documented “active diversifiers” (countries holding >5% in nontraditional currencies) as rising, and even flags growing gold accumulation as a hedge.
Notably, many experts stress that alternatives are incomplete. A Carnegie Endowment analysis points out that most BRICS trade still uses dollars and that converting a multi-currency trade system is hard because of existing debt and market liquidity patterns. The Atlantic Council notes there is currently no single currency “fully convertible and freely usable by anyone anywhere” to replace the dollar. And BIS research warns that moving to local currency invoicing has trade-offs: it may reduce external shocks for one country, but global aggregate currency mismatches remain and could shift the locus of instability.
A New Currency Landscape
The global currency landscape is slowly evolving from unipolar toward multipolar. The U.S. dollar remains preeminent, but its dominance is being chipped away incrementally as the Global South — led by giants like China, India, and regional blocs — actively builds alternatives. This shift has deep historical roots (inflation histories and past crises spurred “dollarization” in many countries) and is now driven by contemporary politics (sanctions, shifting alliances) and market realities (desire for diversification, fintech).
In a multipolar currency world, international trade and finance could become more diversified: countries might settle deals in whatever currency best suits their trading partners, be it yuan, rupee, or a regional unit. Lenders like multilateral banks might have larger mandate to issue in local currencies or gold-backed instruments. Importers in Asia or Africa might hedge less in dollars and more in baskets. Central banks could build reserve portfolios with a broader array of assets.
Such a transition would have both benefits and risks. On one hand, Global South economies could gain policy space and resilience against dollar shocks. On the other hand, without a single anchor, the world might face greater exchange-rate volatility and a more complex monetary ecosystem. Large emerging markets — possibly through a strengthened BRICS Bank or a new reserve instrument — will play key roles in shaping the path.
For the United States, the fading of “exorbitant privilege” might mean a reckoning: either a willingness to run smaller deficits or to share power in the international financial system. For global stability, the question is whether the benefits of diversification outweigh the frictions of fragmentation.
In sum, dollar supremacy is not ending abruptly, but its edge is dulling. The Global South’s turn away from the dollar — through swaps, local-currency trade, and new financial networks — signals a more contested and multipolar monetary future. How quickly this plays out will depend on policy choices on all sides: whether the dollar remains stable and accommodative, whether new regional blocs can deliver reliable alternatives, and how global governance adapts. What is clear is that in the coming decades, the international monetary order may look very different than the one built in Bretton Woods – no longer anchored solely by the greenback, but by a constellation of currencies and arrangements reflecting a more multipolar world order.