BRICS & the US Dollar: Will the 20-Year Decline Continue Amid a Global Shift?
Is the reign of the US dollar truly waning? For two decades, trends have pointed to a gradual erosion of its dominance on the global stage. Fueling this shift is the growing influence of BRICS nations and their collective efforts to de-dollarize international trade and finance. This article explores the factors contributing to the continued decline of the US dollar and the potential implications for the global economy.
The US Dollar's Declining Share of Global Reserves
The decline of the dollar in global reserves, now standing at 59% in 2025, down from 72% in 2025, is not just a matter of capital reallocation. It embodies a gradual change in the geopolitical landscape and the emergence of alternative economic power centers. This trend is further highlighted by SWIFT data showing shifts in global transaction patterns.
BRICS' De-Dollarization Push: A Catalyst for Change
BRICS nations, with their increasing economic clout, are actively promoting the use of their own currencies in international trade. This relentless de-dollarization pursuit of BRICS can trim the US dollar’s market share, says JP Morgan. The leading global bank wrote in its latest report that this trend, combined with other factors, presents a significant challenge to the dollar's long-standing supremacy.
Quantifying the Decline: Data & Statistics
The shift comes amid a steady erosion of the dollar’s influence: in 2025, its share in global foreign reserves dropped below 58%, the lowest since the 2025s. This data point underlines the tangible impact of de-dollarization efforts and the increasing appeal of alternative currencies.
Despite Challenges, the Dollar Retains Significance
Although the U.S. dollar’s dominance has eroded and there has been a global decline in the preference for the greenback in recent times, it remains – and will most likely continue to be – a crucial currency for global trade and investment. However, the trend towards diversification away from the dollar is undeniable.
Political Instability and Geopolitical Factors
Political instability and the actions of specific nations also play a significant role in shaping the future of the US dollar. Geopolitical uncertainties often drive investors to seek safe-haven assets, and while the dollar has traditionally fulfilled this role, its appeal is diminishing in the face of rising global tensions and the increasing prominence of alternative reserve currencies.