ISLAMABAD: For decades, the US dollar reigned supreme, underpinning global trade, reserves, and commodity markets. But that dominance is now under unprecedented pressure. Nations across Asia, Africa, Latin America, and the Middle East are questioning the wisdom of relying on a single currency controlled by one country, while actively building alternatives that could reshape the global financial order.
Leading this shift are China, Russia and India. Over the past year, India sold more than $50 billion in US Treasuries, marking a 21 per cent decline—the first annual drop in four years. China offloaded $71 billion in American debt between October 2024 and October 2025. BRICS nations collectively reduced Treasury holdings by $29 billion in a single month, signaling a quiet but coordinated shift in reserve management.
The dollar’s vulnerabilities are clear. US government debt has soared past $38 trillion, interest rates have become volatile, bond prices have fallen, and borrowing costs have surged. Geopolitical risks compound the problem: Russia’s dollar reserves were frozen under Western sanctions, proving that dollar assets can be weaponised. The lesson is stark: placing all financial trust in a single currency is no longer safe.
As a result, nations are diversifying. Gold has returned to the centre of reserve strategies. India now holds nearly 880 tonnes, representing more than 16 per cent of its foreign exchange reserves—the highest in two decades. China’s gold reserves have surpassed 2,300 tonnes, with the central bank continuing monthly purchases. Unlike US Treasuries, gold carries no default or sanctions risk, offering stability amid mounting geopolitical turbulence.
Trade and payments are also increasingly moving beyond the dollar. China conducts transactions in yuan with over 40 countries, while India has established special rupee accounts with banks in 20 nations. Russia and Iran conduct much of their trade in ruble and yuan, while Saudi Arabia has begun accepting non-dollar currencies for oil, breaking a half-century-old petrodollar convention. Across Africa, Asia, and the Commonwealth of Independent States (CIS) region, cross-border trade increasingly relies on local currencies and gold, reducing exposure to the US dollar and signalling a structural shift in global commerce.
Alternative payment infrastructures further reinforce this trend. China’s CIPS, Russia’s SPFS, and emerging BRICS digital settlement platforms aim to bypass the SWIFT network, reducing vulnerability to financial coercion. India has proposed a BRICS-based digital currency network, while Project mBridge experiments with cross-border central bank digital currency payments backed by gold and national currencies. Even US financial markets show signs of fragility. On January 29, 2026, the S&P 500 dipped just 0.1 per cent, yet tech giants like Microsoft lost $357–360 billion in market value in a single session, highlighting the vulnerability underlying apparent market stability.
Experts agree that the era of unquestioned dollar supremacy is ending. Joyce Chang of J.P. Morgan observes, “The US dollar will remain a leading world currency, but it will no longer be the dominant world currency.” BRICS countries are actively pursuing blockchain-based multi-currency settlements, while emerging economies increasingly embrace the yuan, rupee, ruble, and gold. These shifts are gradually eroding the global dollar ecosystem.
The implications for the United States are significant. Dollar dominance has long been a cornerstone of Washington’s geopolitical leverage, enabling sanctions, dictating trade rules, and projecting financial influence worldwide. That grip is loosening. The world is moving toward a multipolar financial system in which trust in a single currency can no longer be assumed. Nations are hedging, diversifying, and in many cases, bypassing the US dollar entirely.
Across BRICS and oil-producing nations, the movement away from the dollar is most pronounced. China promotes the use of yuan in global trade, with 47 per cent of its transactions now conducted in yuan. India advocates for rupee settlements in bilateral trade and maintains special accounts in 20 countries. Russia has reduced dollar holdings and conducts much of its trade with China in ruble and yuan while operating the SPFS payment system as an alternative to SWIFT. Iran conducts oil trade in yuan and ruble through the Mir payment system, while Saudi Arabia accepts yuan for oil sales to China. Across Africa, countries such as Ghana are paying for oil imports in gold, while Zimbabwe has introduced a gold-backed digital currency, the ZiG. Other nations, including Nigeria, Algeria, Egypt, Pakistan, Bangladesh, Cuba, and the UAE, are increasingly conducting bilateral trade in local currencies or gold, further undermining the dollar’s global reach.
Asian and CIS countries are similarly reducing dollar dependency. ASEAN nations encourage local currency settlements to reduce transaction costs and enhance regional cooperation, while CIS members conduct approximately 85 per cent of cross-border trade in local currencies. Malaysia, Indonesia, Thailand, and the Philippines are promoting regional payments in local currencies, while countries like Armenia, Azerbaijan, Belarus, and Kazakhstan are actively pursuing dollar-free cross-border trade arrangements. Even smaller economies, such as Mauritius, Sri Lanka, and Luxembourg, are embracing currency diversification and digital payment frameworks outside the US dollar system.
African nations are pursuing monetary sovereignty through regional currencies, prohibiting foreign currencies in domestic transactions, and aligning with BRICS-led initiatives. Collectively, these moves represent the most organised challenge to US dollar hegemony in decades.
The greenback may still dominate headlines and financial charts, but in central banks across Asia, Africa, and Latin America, the message is clear: the era of unquestioned American monetary hegemony is ending. Nations are no longer content to operate at the mercy of US monetary policy. Instead, they are building a multipolar, diversified financial system—one in which the dollar is no longer the only safe bet.
