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De-dollarisation: what is really happening
The latest Dollar Dominance Monitor by the Atlantic Council confirms a key finding for investors and analysts: the U.S. dollar remains the cornerstone currency of the international financial system.
Despite the growing narrative surrounding so-called de-dollarization, the data reveals a far more stable scenario than the perception often conveyed in the media and in geopolitical debate.
According to the report:
- the dollar accounts for roughly 58% of global foreign exchange reserves
- it dominates international trade invoicing
- it is involved in nearly all foreign exchange market transactions
No other currency — the euro, renminbi, yen or pound sterling — currently possesses the same market depth, liquidity and institutional trust.
Why de-dollarization is being talked about
In recent years, especially following Western sanctions against Russia, several countries have begun exploring alternatives to the dollar. The report identifies three main trends.
1. Greater use of local currencies
Some emerging economies are experimenting with bilateral trade agreements denominated in national currencies, particularly within the BRICS countries.
2. Alternative payment systems
China is expanding the CIPS system, while India and Brazil are working on the development of interoperable platforms aimed at reducing dependence on Western financial networks.
3. Growth of CBDCs
Central bank digital currencies (CBDCs) are seen as potential tools to facilitate international payments independent of the dollar.
However, according to the Atlantic Council, these initiatives remain slow, fragmented and far from being a genuine global alternative.
Geopolitics and markets: between narrative and real data
A key point highlighted in the report concerns the composition of U.S. debt holders. Today, most U.S. Treasuries are owned by private investors rather than foreign governments.
This factor significantly reduces the risk that a single country could destabilize the United States by selling securities on a large scale.
Furthermore:
- U.S. financial markets remain the most liquid in the world
- institutional confidence in the United States exceeds that of emerging economies
- currency diversification is real but not a substitute
The analysts’ conclusion is clear: many countries are not “abandoning” the United States, but are simply hedging against the “America risk” (hedging America).
The euro: strong at a regional level
The euro remains the world’s second most important international currency but faces structural limitations that hinders its global rise:
- fragmentation of European financial markets
- lack of a truly common public debt
- energy and geopolitical vulnerabilities
Without greater fiscal and political integration, the euro is unlikely to compete with the dollar on a global scale.
BRICS: big ambition, limited progress
The BRICS bloc will likely continue developing:
- local-currency payment systems
- alternative payment systems
- cooperation on digital currencies
However, a fundamental internal divide remains: whether or not to accept China’s financial leadership.
Without shared governance, the creation of a common currency or a credible alternative monetary system still seems unlikely.
Conclusion: the dollar remains at the centre of the system
The message from the Dollar Dominance Monitor is unequivocal:
- the dollar is not in decline
- de-dollarisation exists, but it is progressing slowly
- the global financial system will remain dollar-centric for a long time to come
The narrative of a “dollar collapse” therefore appears to be more political than economic. Today, no other currency offers the same combination of stability, liquidity and international trust.
Clarissa Van Vuuren
Honorary President
