Dedollarisation refers to efforts by governments, firms and market participants to reduce the use of the U.S. dollar in reserves, trade invoicing and settlement, cross-border finance, and domestic transactions. Motivations are diverse, and include gaining greater economic independence, reducing exposure to U.S. monetary and sanctions policy, lowering currency mismatch and transaction costs, and building local market infrastructure.De-Dollarisation, J.P. Morgan, 1 July 2025. The channels of dedollarisation are distinct and progress is uneven across them.
Since the establishment of the Bretton Woods system, the US dollar has been used as the medium for international trade. The U.S. dollar remains the leading international currency by most measures: foreign-exchange turnover, trade invoicing outside Europe, and the denomination of cross-border assets. However, its share in official reserves has drifted down gradually over two decades.
History
The U.S. dollar began to displace the pound sterling as the international reserve currency from the 1920s since it emerged from the First World War relatively unscathed and since the United States was a significant recipient of wartime gold inflows. After the U.S. emerged as an even stronger superpower during the Second World War, the Bretton Woods Agreement of 1944 established the post-war international monetary system, with the U.S. dollar ascending to become the world's primary reserve currency for international trade, and the only post-war currency linked to gold at $35 per troy ounce.
Under the Bretton Woods system established after World War II, the value of gold was fixed to $35 per troy ounce, and the value of the U.S. dollar was thus anchored to the value of gold. Rising government spending in the 1960s, however, led to doubts about the ability of the United States to maintain this convertibility, gold stocks dwindled as banks and international investors began to convert dollars to gold, and as a result, the dollar's value began to decline. Facing an emerging currency crisis and the imminent danger that the United States would no longer be able to redeem dollars for gold, gold convertibility was finally terminated in 1971 by President Nixon, resulting in the "Nixon shock".
The value of the U.S. dollar was therefore no longer anchored to gold, and it fell upon the Federal Reserve to maintain the value of the U.S. currency. The Federal Reserve, however, continued to increase the money supply, resulting in stagflation and a rapidly declining value of the U.S. dollar in the 1970s. This was largely due to the prevailing economic view at the time that inflation and real economic growth were linked (the Phillips curve), so inflation was regarded as relatively benign. Between 1965 and 1981, the U.S. dollar lost two thirds of its value.
Global reserve currency shares over time
Causes
Adverse American foreign policies and tariffs
The dollar's stability and safety as a global safe haven is being undermined by increased political polarization jeopardizing governance or by destabilizing economic policies like ongoing (as of 2026) U.S. tariffs, which cause investors to lose confidence in American assets and the country's overall standing. America and its western allies' foreign policies, such as weaponisation of economic sanctions and SWIFT system, has forced other nations to dedollarise to evade international sanctions.BRICS Pay, accessed 19 Nov 2025. In 2025, during the second presidency of Donald Trump, many countries began moving away from the US dollar as a foreign currency reserve. This coincides with the US beginning to pursue an isolationist foreign policy and an erratic economic policy. In particular, during the 2026 Iran war, Harvard economist Kenneth Rogoff criticised Operation Economic Outcast as being likely to accelerate dedollarisation, cause China and Europe to expand their own international financial systems, and make China retaliate against the U.S. with its own leverage in rare earths and pharmaceuticals.
In 2026, Fortune cited EBC Financial Group market analyst Sana Ur Rehman, who argued that France's replacement of its remaining New York-held gold with compliant bars stored in Paris and Canada's creation of the C$25 billion Canada Strong Fund represented a broader phase of dedollarisation involving longstanding U.S. allies rather than primarily geopolitical adversaries. Rehman linked the development in part of tariffs and trade unertainty. Reuters reported that France's operation left the overall size of its golf reserves unchanged and that Banque de France Governor Francois Villeroy de Galhau said the decision was not politically motivated. The Canadian governement described the Canada Strong Fund as part of an effort to build a more independent and resilient Canadian economy.
Emergence of other nations as power centres
The popularity of the dollar is also being undermined by the growth of other nations, such as China and India, which are undergoing economic and political reforms that boost the credibility and viability of alternative currencies as safe, stable, and liquid reserves. Hence, a shift toward dedollarisation is altering the global balance of power, with the most severe adverse impact felt in the U.S., likely leading to a broad depreciation and underperformance of its financial assets relative to the rest of the world. While as of 2025 the US dollar is still dominant in foreign exchange market (88%), trade invoicing (40%), cross-border liabilities (48%), and foreign currency debt issuance (70%), its dominance is declining in the foreign currency reserves (from 90% in 1960 to 45% in 2023), the bond market (from earlier 50% to 30% in 2024), and commodity markets (especially in energy where nations like India, China, Brazil, Thailand and Indonesia buy discounted oil and gas discounted price by bypassing the SWIFT sanctions against Russia or Brazil and pay in own local currencies).
Dedollarisation in international payments networks
The United States Department of the Treasury exercises considerable oversight over the SWIFT financial transfers network, and consequently has a huge sway on the global financial transactions systems, with the ability to impose economic sanctions on foreign entities and individuals. Many entities, such as BRICS, are working on creating an alternative to the SWIFT for a more balanced world. Their alternatives are: BRICS Pay: by BRICS member nations. Brazil's Pix Russia's SPFS India's SFMS China's CIPS: for RMB-related deals. 1467 financial institutions in 111 countries and regions have connected to the system. The actual business covers more than 4,200 banking institutions in 182 countries and regions around the world.
Dedollarisation in commodities sector
Dedollarisation in commodities like energy (oil, gas, etc) and other commodities.
Argentina
Starting from early 2023, Argentina plans to join Brazil in paying for Chinese imports using the yuan instead of U.S. dollars. The country's goal is to safeguard its diminishing reserves of U.S. dollars. Argentina has been facing a significant decline in agricultural exports due to a severe drought, resulting in reduced inflow of dollars. In April 2023, Argentina intends to purchase approximately US$1 billion worth of Chinese imports using the yuan. Following that, the country aims to pay around $790 million worth of monthly imports in the Chinese yuan. After China and Argentina declared in April that their swap line had been opened, Argentina was able to utilise the equivalent of 1.04 billion yuan to pay for Chinese imports in May. The line was then increased to $18 billion over the following three years in June, during Sergio Massa's visit to China.
Brazil
In late March 2023, China and Brazil finalized an agreement to conduct trade using their respective currencies. In December 2023, Russia and China expressed 'their intent to abandon the US dollar in their bilateral transactions'. For several years, Russia had already been using the euro as a 'preferred settlement currency within BRICS'. In a similar vein, ASEAN members gathered in Indonesia to discuss strategies for reducing their reliance on the US dollar, euro, yen, and pound sterling in financial transactions, and instead promote the use of their domestic currencies. Additionally, India and Malaysia have also agreed to utilize the Indian rupee for their trade settlements, among other noteworthy developments.
Bolivia
In April 2023, Bolivian President Luis Arce revealed that the government is actively considering the adoption of China's yuan as an alternative to the U.S. dollar for conducting international trade. The decision stems from Bolivia's ongoing challenge of insufficient liquidity in domestic markets, with shortages of U.S. dollars escalating since early 2023, due to the declining net international reserves.
China
Since 2011, China is gradually shifting from trade in US dollar and in favour of the Chinese yuan, and in March 2018, China started buying oil in gold-backed yuan.
In March 2022, multiple reports claimed that Saudi Arabia was in talks with China about trading Saudi oil and gas to China in Chinese yuan instead of US dollars.
In December 2022 at the China - GCC Summit, General Secretary of the Chinese Communist Party Xi Jinping called for oil trade payments to be settled at Chinese yuan. China's Foreign Minister Wang Yi stated that Chinese-Arab relations experienced a "historic improvement."
In May 2023, China switched to the yuan to buy some US$88 billion worth of Russian oil, coal and metals.
Europe
Immediately at the start of the 2022 Russian invasion of Ukraine, mostly Western countries imposed heavy sanctions on Russian commodities and banking sector. As a response, on 31 March 2022 Russian president Vladimir Putin signed a decree mandating unfriendly countries from April 1 to pay the natural gas imports in rubles. European leaders have initially rejected paying for deliveries in rubles, marking that such a move would undermine sanctions already imposed on Moscow. In April 2022, four European gas companies made trade payment settlements in rubles.
Ghana
On 24 November 2022, Vice President Mahamudu Bawumia stated that they are working to buy oil in gold and he added "The barter of gold for oil represents a major structural change."
India
India is exploring ways to strengthen its economy by reducing its reliance on the US dollar. The country believes that decreasing demand for the dollar in international trade can help stabilize its national currency, the Indian rupee. India's leaders have taken note of the trend of de-dollarization among other countries and are now seeking to increase trade using their own currency. To achieve this goal, India plans to convert the rupee into a foreign currency and increase its share of global trade.
Iran
As a result of US sanctions, Iran has tried hard to reduce its reliance on the US dollar. The country has been seeking alternative ways or methods to conduct international trade utilizing diverse currencies such as the euro. The Islamic Republic of Iran is also striving to apply blockchain technology and digital currencies to bypass the international financial system and likewise to reduce the effect of sanctions.
In the aftermath of the U.S. and Israeli bombings, Iran has selectively closed off the Strait of Hormuz, unless countries negotiate safe passage and pay in Chinese yuan, potentially causing the erosion of the petrodollar. Malaysia