The de-dollarization movement is accelerating as 12 countries have collectively decided to abandon the US dollar for trade. These nations are now using local currencies for cross-border transactions, aiming to reduce their reliance on the US dollar. This shift indicates that emerging economies are eager to strengthen their local currencies and boost their presence in the forex markets. The global dominance of the USD appears to be waning, and developing countries are stepping in to fill the gap.
The de-dollarization initiative officially began after the White House imposed sanctions on Russia in February 2022. In response, Russia and China embarked on a global campaign to persuade other countries to ditch the US dollar. The proposal was appealing as it offered local currencies a chance to gain a stronger foothold in the markets.
The Commonwealth of Independent States (CIS), comprising 12 countries, has officially abandoned the US dollar for trade. These nations have conducted 85% of their cross-border transactions in local currencies, with only 15% of payments made in US dollars in 2024. This move highlights the growing trend of de-dollarization and the increasing discontent with the US dollar.
“The use of national currencies is expanding in mutual payments,” said Russian President Vladimir Putin at the CIS summit. “Their share in commercial operations among CIS participants has already exceeded 85%,” he noted, emphasizing the growth of de-dollarization. “The process of import substitution is advancing rapidly, thereby strengthening our country’s technological sovereignty,” he added.
If de-dollarization continues to rise, the US dollar could lose its position in the global supply and demand dynamics. Additionally, the currency might depreciate as emerging economies diversify their reserves with gold and other assets. The coming decades could mark a significant turning point as de-dollarization initiatives challenge the dominance of the US dollar.
Source: Watcher Guru
