The End of Dollar Dominance: Geopolitical Shift or Economic Security?
September 3, 2025214 ViewsRead Time: 3 minutes
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At the Shanghai Cooperation Organization summit in Tianjin, Russian President Vladimir Putin stood to announce what many described as the funeral bell for the dollar's unilateral dominance. His words were not just a fleeting political speech, but reflected a profound geopolitical shift that has begun to surface in the global financial system.
Putin, who described reliance on the dollar as a "political blackmail tool," was not speaking without basis. The increasing American sanctions, which have tripled since 2000, have transformed the green currency from a means of trade to a geopolitical weapon. These shifts have prompted countries from Kenya to Sri Lanka to seek alternatives, from local currency exchange agreements to increasing gold reserves.
The numbers speak for themselves: the dollar's share of global reserves has fallen to 57.8%, down from over 70% at the turn of the millennium. This decline, although slow, reflects an upward trend towards monetary pluralism that emerging economies are seeking to protect themselves from the fluctuations of American policy.
Ground-level observations tell a different story. In Kenya, oil agreements in local currencies have eased pressure on the dollar by $500 million monthly. In Sri Lanka, settlements in Indian rupees have reduced reliance on the American currency. These pragmatic solutions, despite their limitations, prove that the world is searching for new ways to conduct financial transactions.
The vision proposed by Putin for the Shanghai Organization - a common payment system and collective bonds - seems ambitious, but it faces significant challenges. Building a parallel financial system requires more than political will; it necessitates complex financial infrastructure, high levels of mutual trust, and the ability to provide the liquidity and stability that American markets offer.
Estimates suggest that the dollar's share could drop to 50% by 2035, but this does not mean the end of its dominance. The absence of a clear and strong alternative will keep the American currency at the forefront, albeit with less strength than before.
It seems the world stands at a crossroads: on one hand, an increasing desire to break free from American dominance, and on the other, the absence of a real alternative that can fill the void. The shift towards monetary pluralism will take a long time and will be fraught with risks, but it has become a necessity for many countries tired of using their currency as a weapon against them.
The message Putin sent from Tianjin may just be the beginning of a long journey towards a more balanced global financial system, but the road ahead remains long and arduous.
Putin, who described reliance on the dollar as a "political blackmail tool," was not speaking without basis. The increasing American sanctions, which have tripled since 2000, have transformed the green currency from a means of trade to a geopolitical weapon. These shifts have prompted countries from Kenya to Sri Lanka to seek alternatives, from local currency exchange agreements to increasing gold reserves.
The numbers speak for themselves: the dollar's share of global reserves has fallen to 57.8%, down from over 70% at the turn of the millennium. This decline, although slow, reflects an upward trend towards monetary pluralism that emerging economies are seeking to protect themselves from the fluctuations of American policy.
Ground-level observations tell a different story. In Kenya, oil agreements in local currencies have eased pressure on the dollar by $500 million monthly. In Sri Lanka, settlements in Indian rupees have reduced reliance on the American currency. These pragmatic solutions, despite their limitations, prove that the world is searching for new ways to conduct financial transactions.
The vision proposed by Putin for the Shanghai Organization - a common payment system and collective bonds - seems ambitious, but it faces significant challenges. Building a parallel financial system requires more than political will; it necessitates complex financial infrastructure, high levels of mutual trust, and the ability to provide the liquidity and stability that American markets offer.
Estimates suggest that the dollar's share could drop to 50% by 2035, but this does not mean the end of its dominance. The absence of a clear and strong alternative will keep the American currency at the forefront, albeit with less strength than before.
It seems the world stands at a crossroads: on one hand, an increasing desire to break free from American dominance, and on the other, the absence of a real alternative that can fill the void. The shift towards monetary pluralism will take a long time and will be fraught with risks, but it has become a necessity for many countries tired of using their currency as a weapon against them.
The message Putin sent from Tianjin may just be the beginning of a long journey towards a more balanced global financial system, but the road ahead remains long and arduous.
