Is the U.S. Dollar Losing Its Global Clout?

Bloomberg's latest report shows that the U.S. dollar's value is decreasing rapidly, about 10 times faster than in the past 20 years.

Currently, the U.S. dollar accounts for 58% of global reserves, compared to 73% in 2001. This is believed to be due to developing nations’ experimentation with de-dollarization. Over the past two decades, the dollar has dropped by almost 15%, and concerns about an upcoming BRICS currency have led to further declines.

Since 2016, the dollar has lost approximately 11% of its market share due to developing nations replacing it for international trade. This trend has gained momentum, and it is causing the dollar to face the risk of global collapse.

China and Russia’s exceptional actions have challenged the dollar’s hegemony, leading other nations to side with them.

This has alarmed the U.S., as some European countries have started buying laundered oil from Russia via Saudi Arabia, and France has settled an LNG gas trade with China in Chinese Yuan. As a result, developing nations and European countries are seeking alternatives to the dollar.

Reports show that gold instead of the U.S. dollar may back the new BRICS currency. The World Gold Council has reported that BRICS nations, including China, Russia, and India, have bought tonnes of gold instead of the dollar. During Q1, 2023, these nations collectively purchased around 135.9 tonnes of gold.

If the BRICS currency becomes internationalized, the dollar may lose its status as a global reserve currency, causing economic turmoil in the U.S. As the dollar has already lost its luster, any additional pressure could result in losing its global influence.

The fate of the U.S. dollar’s prospects may be decided at the next BRICS meeting in South Africa in August 2023.

Author

Alexander Stefanov

Reporter at CoinsPress

Alex is Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.