De-dollarization tipping point as multipolar finance takes hold

On November 4, Russia’s Finance Minister Anton Siluanovstatedthat almost all trade between Russia and China (99.1% to be exact) now happens outside the Western financial system in only rubles and yuan.

This wasn’t just another number but a quiet, if not clear, signal that the age of the US dollar dominating everything is winding down. For the first time since World War II, the axis of global trade is no longerspinning solelyaround Washington and Wall Street.

Just a few years ago, nearly every transaction between Moscow and Beijing ran through Western banks, was settled in dollars or euros and was monitored under Western-dominated systems likeSWIFT. That world is now gone.

The Ukraine war and the avalanche of Western sanctions on Moscow that followed did what decades of economic theory could not—it forced Russia to rewire its economic arteries.

Blocked from Western credit lines, frozen out of currency reserve markets and denied access to dollar settlements, Moscow turned eastward. Theresultis what we now see: a 99% shift away from Western currencies in Russia-China trade.

The sanctions boomerang

Russia’s integration with Asia was accelerated by Western sanctions intended to isolate it. It gives a clear lesson that innovation is often fostered by coercion.

The Global South received a clear message that when the US and wider Westweaponizedtheir currencies by freezing Russian assets, limiting bank access and threatening to shut down entire economies, your money is safe only as long as Washington says it is.

For much of the world, that realization was a turning point. The “global majority,” as Russian and Chinese diplomats now like to call it, began to see de-dollarization not as an act of rebellion but as a form of self-defense.

“Economic sovereignty” has become the new watchword of our time, a concept once limited to political theorists now taking on real meaning for nations tired of living under the shadow and what many now see as abuse of US financial power.

Sanctions on Russia were the spark, but the kindling had been laid for decades. The overuse of the dollar as ageopolitical weapon—from Iran to Venezuela, from Cuba to Afghanistan—has eroded trust in its neutrality and reliability.

Each new sanctions package signaled that the dollar was no longer a mere currency but a tool of control.

New financial axis

Enter Russia’s ruble and China’s yuan. What began as a desperate adaptation to survive sanctions has become the foundation of a new financial ecosystem.

Trade between Moscow and Beijing no longer depends on dollar-based intermediaries. Funds move directly through local institutions. Cross-border payment systems likeChina’s CIPS(Cross-Border Interbank Payment System) now link nearly 5,000 banks across 185 countries, bypassing SWIFT entirely.

Deputy Prime Minister Alexander Novak recentlyconfirmedthat 90-95% of Russia’s trade with China and India is now conducted in local currencies. This transformation wasn’t planned by bureaucrats—it evolved organically, driven by necessity and market logic.

It’s not just Russia. There is growingmomentum to localize trade settlements across BRICS.The New Development Bankof BRICS is offering loans in local currencies so borrowers won’t be affected by the dollar’s volatility.

ASEANcountries also want to strengthen regional linkages and reduce dollar dependence.

A philosophy, not a rebellion

It would be a mistake to interpret de-dollarization as an anti-American crusade.

As many analysts point out, the objective isn’t to “destroy” the dollar but to democratize global finance—to ensure that no single nation can unilaterally dictate terms to others.

For the first time in living memory, nations are openlyquestioningwhether a single currency should wield such overwhelming influence over international markets.

At its core, this is a philosophical shift. For nearly a century, the dollar represented stability, trust and predictability.

As of 2024, it still accounts for about57.7%of global foreign exchange reserves—a formidable share, but a steadydeclinefrom 71% in 2000. The erosion has been slow but steady.

And as Russia and China demonstrate credible alternatives, that decline may soon accelerate.

China’s strategic patience

For Beijing, this is a victory of patience and precision. China has long sought tointernationalizethe yuan, but Western skepticism and China’s capital controls have kept it at bay.

Now, Russia’s isolation has given the yuan a sudden, practical role. By settling energy deals in yuan, Beijing hassecureddiscounted Russian oil and gas while elevating its own currency’s credibility.

Yet, this alignment is not without risks. Russia’s growing reliance on Chinese markets and technology gives Beijing disproportionate leverage, a situation that Moscow may find undesirable over time. But for now, necessity overrides caution.

At the same time, China’s economic diplomacyextendswell beyond Russia. More nations are requesting payment in yuan. Countries in Africa, Latin America and the Middle East arelaunching yuan-clearingcenters for direct trade. It was unthinkable for a big economy to consider other currencies for payment of oil, but today it seems almost inevitable.

BRICS blueprint

BRICS, once dismissed as a loose acronym, is morphing into a parallel economic order. Its forthcoming payment system aims tofacilitatecross-border transactions without touching the Western-led SWIFT network.

The New Development Bank’s lending in local currencies is a quiet revolution, enabling developing nations to borrow without surrendering monetary autonomy.

Still, this experiment is not without friction. TheBRICSnations differ widely in their politics and economic models. India and Brazil, with their Western ties, move cautiously, while China and Russia push for greater independence. Yet, even cautious steps mark progress. As history teaches, financial revolutions are rarely sudden—they are cumulative.

Washington has taken note. American officials, not least Donald Trump, havewarnedthat bypassing the dollar could invite new US tariffs or sanctions. But the threat itself underscores the problem. Every punitive measure against alternative systems to dollar payment only strengthens the argument for those systems’ existence.

Currency power follows economic power. In the early 20th century, Britain’s pound yielded toAmerica’s dollarbecause factories in Detroit and Pittsburgh outproduced those in Birmingham and Manchester. Today, as manufacturing and resource extractionshifteastward, the global financial system is slowly but surely following suit.

Dawn of multipolar finance

To be sure, the ruble-yuan alliance is not a coup against the dollar; it is an acknowledgment that the world has outgrown a single-center system. For the first time since 1945, global trade flows are trulymultipolar.

The dollar will not vanish overnight; no currency ever does. But its uncontested dominance is ending. What lies ahead is amore fragmented but more balanced landscape—where Moscow trades in rubles, Beijing in yuan, Riyadh in riyals and New Delhi in rupees.

The ongoing transition away from dollar dominance will inevitably be messy and at times inefficient, but undeniably more plural.

The dollar era, forged in the ashes of World War II, gave the world seven decades of stability—and of subordination. The next era, born in the crucible of sanctions and resilience, promises something different: sovereignty through diversification.

The dollar is not dead, but it is no longer alone.

M A Hossain is a senior journalist and international affairs analyst. He can be reached at:writetomahossain@gmail.com