As we reach September 2025, one question is shaking global markets: is the US dollar (USD), the undisputed king of currencies for decades, on the verge of losing its crown?
By 2000, the USD made up 70% of global reserves. By April 2025, the USD share of global reserves dropped to 58%, according to the Bank for International Settlements (BIS).
Since the start of 2025, the USD has dropped more than 10% against other major currencies, although recovering some of its losses since July 2025. Its long-standing role as a safe haven is being challenged, as central banks rush to gold and cryptocurrencies surge. Meanwhile, US Treasury bonds – once the bedrock of global finance – are steadily losing value, under the weight of America’s staggering $37 trillion debt (120% of GDP) and a yearly fiscal deficit of $2 trillion (7% of GDP).
De-dollarization – the movement to reduce reliance on the dollar in global trade and reserves – is gaining momentum. But where is this trend coming from? Why is it accelerating now? And what does it mean for international trade, especially for SMEs like yours? Let’s dive into this monetary shift with Keewe to separate fact from fiction.
Where is this de-dollarization wave coming from?
The USD became the world’s reserve currency after World War II through the Bretton Woods Agreement in 1944. Initially pegged to gold, its dominance was cemented by the United States’ global economic leadership. But in 1971, President Nixon ended the gold standard, and the dollar began to float, backed by trust in the strength of the US economy. For decades, it worked. By 2000, the USD made up 70% of global reserves, according to the Bank for International Settlements (BIS).
Yet cracks have started to show. The 2008 financial crisis sowed doubts. Sanctions against Iran in 2010 and Russia in 2014 sparked doubts and questions. Then came the freezing of $300 billion in Russian reserves in 2022 — a turning point. More and more countries began to ask: what if the USD has become a geopolitical weapon that’s too risky to hold?
Why is this trend accelerating in 2025?
Several factors, amplified by recent events, are driving the push toward de-dollarization.
First, there are the unilateral sanctions imposed by the United States and the European Union on the Russian Federation. According to Bloomberg (May 2025), China and Russia now conduct 55% of their trade in yuan, bypassing USD flows altogether. India is doing the same, stepping up imports of Russian oil and gas and settling payments in rupees instead of dollars.
Second, the rise of emerging economies. The BRICS countries — Brazil, Russia, India, China, and South Africa — now account for 26% of global GDP (IMF, 2024) and are demanding a greater say in the global financial system.
Then there’s currency volatility. The Federal Reserve’s interest rate hikes, which reached 5.5% in 2023, contributed to the USD share of global reserves dropping to 58% as of April 2025 (BIS).
New developments in 2025 are adding fuel to the fire. Since the dollar has not been backed by gold since 1971, its vulnerability is once again under scrutiny — a point raised by the Financial Times in June 2025. US inflation, which stood at 2.5% in May (Reuters), continues to erode the dollar’s real value.
Investors are also concerned about America’s ballooning debt, which has now exceeded $37.5 trillion (Financial Times, June 10). In March, Moody’s downgraded the US debt outlook to “negative” (The Edge), signaling declining credit quality.
And then there’s Trump’s erratic policy approach to trade tariffs. His so-called “Liberation Day” tariffs — a 10 to 20% duty on imports (Financial Times, June 8) — have weakened the dollar, which dropped to 1.15 USD per euro (Bloomberg, May 23). The back-and-forth negotiations and contradictory announcements have only increased uncertainty. These events are prompting countries to diversify away from the dollar faster than ever before.
What does de-dollarization look like in practice?
De-dollarization is no longer just a theory — it’s becoming a reality. Central banks are stocking up on gold, reflecting growing distrust toward the US dollar and fiat currencies in general. According to Bloomberg (June 10, 2025), central bank gold reserves increased by 483 tons in the first quarter of 2025. Russia now holds 24% of its reserves in gold (Reuters, April 2025), while China added 90 tons in May alone (Financial Times, June 9).
Meanwhile, China and Russia now conduct 55% of their bilateral trade in yuan (Bloomberg, May 2025), and India is paying for Russian and Iranian oil in rupees.
Alternative financial systems are also gaining traction. Russia’s SPFS now handles 22% of member transactions, while China’s CIPS accounts for 17% (Financial Times, June 2025), slowly chipping away at SWIFT’s dominance. Even cryptocurrencies are entering the mix. In Venezuela, Bitcoin now accounts for 6% of all transactions (The Edge, May 2025). It’s a quiet revolution — but a very real one.
What does it mean for international trade?
For businesses, it’s a seismic shift. With 40% of global payments still processed in USD (SWIFT, May 2025), de-dollarization is complicating international trade and settlements.
Exchange rates are becoming more volatile. Converting dollars into euros or yuan is getting more expensive and requires careful planning. SMEs, which often rely on cross-border payments in foreign currencies, now have to manage forward contracts to hedge their exposure — a logistical and financial challenge.
Yet this transition also presents new opportunities. China is expanding trade ties through its Belt and Road Initiative, opening doors to emerging markets. Still, the cost of switching supply chains, currencies and payment systems is significant, especially for smaller players.
What’s next? Possible scenarios for the dollar
The dollar is still king, holding 58% of global reserves (BIS, 2025), but its throne is starting to wobble.
Here are three possible scenarios:
• Gradual rebalancing: The USD declines to 50% of global reserves by 2030, while the euro rises to 25%, the yuan to 10%, and gold to 15% (Bloomberg, June 2025). A soft adjustment driven by bilateral trade agreements.
• Sudden crisis: A major shock — such as new sanctions or a collapse in confidence — could push the USD down to 40% by 2027, triggering extreme volatility (Reuters, May 2025).
• Multipolar shift: A new system emerges with the euro, yuan, and digital euro (currently in testing, Financial Times, 2025), bringing the USD to 45% by 2030.
Can the dollar remain the world’s reserve currency?
Yes — but with caveats. The depth of US financial markets and the strength of the American economy still support the USD. However, its massive debt burden, now at $37.5 trillion, along with recent tax and trade policy shifts, are eroding confidence.
If the dollar were to lose its reserve status, US inflation could soar to 10% (Goldman Sachs, 2025), making imports prohibitively expensive.
Global businesses would need to rethink how they handle supply chains and international payments in the face of increasingly volatile exchange rates and shifting trade dynamics between countries. A sudden transition would be chaotic, though a complete withdrawal from the dollar still seems unlikely in the near term.
Who could take the lead?
• Euro: With 22% of global reserves (ECB, 2025) and the development of a digital euro, it is a serious contender, supported by European economic stability.
• Yuan: Currently at 3%, the yuan is gaining ground thanks to China’s global trade presence, but its limited convertibility remains a major obstacle (Bloomberg, May 2025).
• Gold and cryptocurrencies: Gold (24% of Russia’s reserves) and Bitcoin (6% of transactions in Venezuela) are increasingly viewed as safe-haven alternatives.
• BRICS currency: A gold-backed BRICS currency, discussed in Kazan (Financial Times, June 2025), is still speculative at this stage.
Conclusion: Is Your Business Ready for a Post-Dollar World?
While the US dollar still holds the top spot in global finance, its dominance is steadily declining. The most likely outlook? A gradual rebalancing by 2030, with the dollar’s share of global reserves falling to 50%, and the euro and yuan gaining momentum. A total collapse isn’t expected anytime soon, but rising US debt and unpredictable policies could accelerate a multipolar shift.
For small and mid-sized businesses engaged in international trade, this evolving landscape brings both risk and opportunity.
At Incomlend, we help companies like yours:
✅ Strengthen supply chains amid volatility
✅ Improve cash flow through fast, non-recourse financing
✅ Simplify operations across borders
✅ Navigate currency and credit risk with confidence
🌍 In a world where currencies shift and uncertainty grows, flexibility is your best asset.
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