Heads of state and government from member, partner, and observer countries pose for a family photo during the BRICS summit in Rio de Janeiro on July 7, 2025. Pablo Porciuncula/AFP via Getty Images
Since the end of the Bretton Woods system in 1971, the U.S. dollar has dominated global finance as the chief reserve currency. It’s used in international trade, sovereign lending, and central bank reserves. This dominance allows the United States to borrow cheaply and wield great financial leverage globally. Recent actions by the Trump administration, sometimes labeled a neo-Monroe Doctrine for its assertive posture toward perceived rivals, can be understood through the lens of preserving dollar supremacy against challenges from rising powers such as China and Russia.
The Rise of De-dollarization
Although the dollar remains dominant, its grip has been weakening over decades. According to data from the International Monetary Fund and central bank, the dollar’s share of global foreign-exchange reserves has fallen from more than 70 percent in 2000 to less than 60 percent in recent years; this reflects broader moves by countries to diversify away from U.S. currency dependence. At the same time, China’s share has increased substantially.
