While the global economic order has long been shaped by the hegemony of the US dollar, signs of an inevitable transition are growing. Now, a new milestone has been reached: for the first time in decades, the dollar’s share of global reserves has fallen below 60%. This decline, far from being insignificant, reflects profound changes driven by emerging economies, particularly the members of the BRICS bloc, as they seek to redefine the rules of the global financial game. As central banks in developing countries shift away from the dollar toward gold and their local currencies, a new monetary order may be taking shape.
BRICS Abandon Dollar: A Strategy That Threatens Global Economy
For several years, the BRICS have emerged as key players in redefining global economic balances. Faced with a historical dependence on the US dollar, these nations are adopting a strategy of diversifying their reserves. The central banks of these countries, aware of the risks inherent in the dominance of the dollar, are increasingly turning to gold and their own national currencies. This trend has accelerated, particularly under the impetus of China, whose currency, the yuan, has tripled its share of global reserves to reach 3%. A movement that reflects a clear desire to reduce the influence of the greenback on international transactions and to strengthen their economic sovereignty.
The fall of the dollar in global reserves, which now stands at 59% in 2024, compared to 72% in 2002, is not simply a matter of a reallocation of capital. It embodies a progressive rejection of the American economic model, exacerbated by concerns about the colossal debt of the United States, estimated at 35 trillion dollars. The BRICS, by multiplying initiatives to promote their local currencies, are sending a strong message: they no longer wish to be dependent on a currency whose stability is increasingly called into question.
How are BRICS redefining the rules of the game?
The BRICS-orchestrated de-dollarization is not limited to a simple diversification of assets; it foreshadows a profound restructuring of international financial flows. This transition places increasing pressure on the United States, whose economy has historically been dependent on the hegemony of the dollar. If this trend continues, US financial markets could face unprecedented turbulence. Indeed, a significant reduction in global demand for dollars could trigger a depreciation of the US currency, with consequences for interest rates, foreign exchange markets, and, potentially, the stability of the global financial system.
At the same time, Europe is not immune to this shift. The euro, once seen as a credible alternative to the dollar, has also seen its share of global reserves decline, from 28% in 2008 to 19% today. The Chinese yuan, in particular, is benefiting from this dynamic, strengthening China’s position on the global economic stage. If this trend continues, the international monetary landscape could well be dominated by a multitude of currencies, reducing the influence of traditional currencies and ushering in an era of monetary fragmentation.
Will the United States and Europe be able to adapt to this new paradigm, or will they be relegated to the background of an increasingly multipolar global economy?
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