De-Dollarization Is Happening at a ‘Stunning’ Pace, Jen Says

    The greenback's share in global reserves slid last year at 10 times the average rate of the past two decades as numerous countries looked for alternative reserve currencies after the U.S. government decided to impose sanctions on Russia for their invasion of Ukraine. The dollar has lost 11% of it's market share since 2016 and 22% since 2008

    Some of the reason for the U.S. seeing a decrease in the market share their dollar has comes from the BRICS (China, India, Russia, etc.) nations trying to internationalize their currency for trading settlements due to the U.S. and Europe cutting Russia off of SWIFT. The U.S. dollar has become politicized in the past year as the Biden administration has used it to pressure smaller countries to enforce sanctions they may not agree with. The controversy is that these small developing countries are not able to ditch the greenback due to the strong financial markets that come with using the greenback.

    The U.S. dollar today represents about 58% of the world's global reserves. Given this, it can be claimed that the U.S. dollar's massive role as a leading global currency will not be taken away any time soon. Because smaller countries cannot switch reserve currencies, the U.S. is still able to be a hegemonic power in the global political economy. 

    Now this is not a guarantee due to more countries trending towards losing faith in the U.S. dollar. for example, the BRICS nations and even some Eastern European countries have admitted that they are not confident in the strength of the dollar. Overall, this situation can either improve or worsen, the main indicators to look for are how much inflation rises or falls, and the emergence and adoption of the new BRICS currency in new countries. 

Link: https://finance.yahoo.com/news/dollarization-happening-stunning-pace-jen-082144378.html