De-dollarization isn’t just a headline about the dollar losing share in global FX tables — it’s a strategic unwind of exposure to the US dollar and dollar-denominated assets. Countries aren’t necessarily “dumping” dollars overnight; many are simply reducing reliance on a single currency and building alternative systems and reserves that chip away at the dollar’s dominance over time. Here are three quieter, but consequential, ways de-dollarization is playing out: 1) Local payment rails and cross-border systems Instead of routing everything through dollar-denominated corridors, countries are building their own payment networks that prioritize local currencies. China’s Cross-Border Interbank Payment System (CIPS), launched in 2015 to support international renminbi use, is a prime example. CIPS offers clearing, settlement and messaging capabilities to rival SWIFT — and its usage has climbed steadily, accelerating after Russia-related sanctions in 2022. That said, CIPS still leans on SWIFT infrastructure for many payments: about 80% of transactions on CIPS reportedly continue to use SWIFT (Yeung & Goh, 2022). And in raw volume, CIPS processes roughly $60 billion a day, which is tiny next to the $1,800 billion daily throughput of CHIPS, the main U.S. dollar high-value payment system. Even so, local rails create alternative corridors that reduce friction for non-dollar trade and settlement. 2) A renewed rush into gold Central banks are stacking bullion. Gold’s share of global official reserves rose 3 percentage points in Q1 2025 to 24% — the highest level in 30 years and the third consecutive annual increase. Over the same period, the dollar’s share slipped by about 2 percentage points to roughly 42%, its lowest since the mid-1990s, while the euro held near 15%. Gold overtook the euro in 2024 to become the world’s second-largest reserve asset. Major buyers like China and India have accelerated purchases, treating bullion as a hedge against dollar volatility and geopolitical risk — a classic diversification play that weakens exclusive dependence on the dollar. 3) Contracts and pricing outside the dollar Market pricing conventions are shifting, too. Increasingly, energy and commodity deals are being struck in currencies other than the dollar: oil and petrol trades settled outside the dollar, LNG contracts denominated in euros, and metals priced in alternative currencies all chip away at the dollar’s role as the default invoicing unit. When large commodity flows are priced and settled in non-USD terms, the network effects that have long sustained dollar dominance slowly erode. Why this matters to crypto watchers For crypto markets, de-dollarization is relevant both strategically and operationally. As states and institutions diversify currency exposures and build alternative rails, demand for non-dollar-denominated digital assets, tokenized reserves (including gold-backed tokens), and cross-border stablecoins could rise. Central bank digital currencies (CBDCs) and sovereign payment systems aiming to bypass dollar corridors also change the landscape for cross-border settlement and stablecoin utility. Whether crypto benefits directly will depend on regulatory frameworks, liquidity, and interoperability with these emerging systems. Bottom line: de-dollarization isn’t a single dramatic event — it’s a slow, multi-front process. New payment networks, heavier gold allocations, and the growing prevalence of non-USD pricing are quietly reshaping the global monetary architecture and trimming the dollar’s automatic dominance. Read more AI-generated news on: undefined/news
