What Happens If the World Ditches the Dollar?

(The domino effects on global trade, oil markets, crypto, and U.S. hegemony.)

For over 75 years, the U.S. dollar hasn’t just been a currency—it’s been the bloodstream of global commerce. From oil to cross-border loans, debt settlements to trade finance, the dollar has been the default. But that dominance is now being tested.

Recent moves,BRICS planning a shared currency, UAE and India settling oil trades in rupeesshow a world recalibrating. Digital currencies like USDT (Tether) are rising. Central banks are diversifying reserves. The dollar, once a symbol of global stability, is also becoming a tool of foreign policyand that's driving some countries to explore exit routes.

We’re entering a phase of de-dollarization. It won’t happen overnight, but the shifts are realand they carry profound implications for how value moves, how power is projected, and who sets the rules in global finance for years to come. The new order is looking to rise, will it? is the question people are quietly asking today.

Here is my take to answer the most unasked question

How the Dollar Took Over the World

The dollar’s dominance wasn’t inevitable,it was designed. At Bretton Woods in 1944, the U.S. secured global trust by pegging the dollar to gold, and other currencies to the dollar. Even after Nixon ended gold convertibility in 1971, the system endured.

The real masterstroke was the petrodollar deal. In exchange for military protection, Saudi Arabia priced oil exclusively in USD. This forced global demand: every country needed dollars to keep their economy running.

By the 2000s:

Over 80% of global trade was in USD

90% of forex involved the dollar

58.4% of central bank reserves were in USD (IMF, 2024)

But the 2008 financial crisis showed that dollar-dependence had risks. Quantitative easing flooded markets with USD. Inflationary fears spiked. Yet alternatives remained limited,until now.

Why Countries Want Exit Options

Having observed sanctions regimes up close, In my personal view what changed wasn’t just economics, but mainly politics. The dollar transformed from a neutral medium to a strategic weapon and countries started to recognise this fact and started to look for a way out. .

The 2022 SWIFT cutoff of Russia was a wake-up call. If Washington can pull the plug on your economy, then holding USD becomes a liability, not a safeguard. This fact scared a lot of countries, this because a political risk issue and hence began driving countries like China, India, and Brazil amongst others to look for alternatives.

And the data is hard to ignore:

U.S. Debt-to-GDP: 124% (Q1 2024)

National debt: $34.8 trillion

Inflation: 3.6% YoY

Fiscal deficit: 6.9% of GDP

Would you park your reserves in that environment?

That’s why I see the digital yuan, BRICS currency talks, and INR oil payments not as symbolic movesbut as real strategic hedges. These are countries building monetary exit doors quietly without much fanfare

Impact on Global Trade and Oil

I believe oil is the dollar’s most fragile stronghold. If OPEC+ starts accepting non-dollar payments at scalebe it yuan, rupee, or even stablecoinsthat's will be the tipping point in this game of currency domination

We’re already seeing early moves:

China paid for Brazilian soybeans in RMB

India bought Russian coal in INR

UAE is piloting CBDC corridors

If major oil exporters ditch the dollar, global demand for USD reserves drops, FX volatility rises, and the U.S. financial clout weakens.

Let’s put that in perspective: of the $6.8 trillion daily forex market, nearly 90% involves the dollar. A 10% shift equals $680 billion rerouted. That’s not theoretical and yes it’s happening.

USDT vs. the Dollar: A Synthetic Challenger

USDT (Tether), launched in 2014, was built as a dollar-pegged crypto asset. What makes it unique is its combination of dollar stability and crypto efficiency.

It’s pegged 1:1 to the USD—but without Fed oversight. It operates across chains like Ethereum and Tron. And it offers 24/7, real-time, borderless transfers.

That makes it incredibly powerful in fragile economies. In places like Nigeria, Lebanon, and Argentina, USDT isn’t just an investment—it's a lifeline.

Yet here’s the paradox:

USDT uses the dollar’s brand but not its regulatory system

It is dollar liquidity without dollar control

This duality makes USDT a threat not to the dollar’s value, but to its infrastructure.

Why USDT Might Be the Real Disruptor

It’s about infrastructure. Who controls it. Who builds it. And who trusts it.

With over $110B in circulating supply (May 2025) and daily volume surpassing $120B (CoinMetrics), USDT has become the default unit of account in crypto and beyond.

In sanctioned economies, it bypasses capital controls. For merchants in emerging markets, it’s faster and more reliable than traditional banking. And unlike CBDCs, it doesn’t need bilateral treaties or government approvals.

In truth, USDT’s main competitor isn’t USD. It’s SWIFT.

If stablecoins can handle real-time, low-fee settlements globally especially when paired with DeFi apps, they could become the base layer for the next financial stack.

Do not think that USDT will cananbalise the Dollar. It still could be USA’s way of shifting the dollar hegemony to USDT hegemony and keep the dollar still relevant as that is the final bedrock of the Digital assest. This works on a principle that anyone from Nairobi to Karkow to Auckland to Tasmania to Pune to Santiago to Ottawa to Greenland can trade in USDT and this is quasi way of getting the dollar into everyone’s home

Who Wins, Who Loses?

Winners

1. China

The yuan is gaining real traction. Cross-border pilots of e-CNY are live with UAE, Singapore, and Thailand. And BRI trade deals now often settle in RMB.

2. Crypto-Native Infrastructure

Platforms like Tron, Stellar, and Uniswap are turning into financial rails. Small businesses and freelancers are already using them to bypass expensive intermediaries.

3. Regional Powers

India, Brazil, and UAE are settling trades in local currencies. They now negotiate from a position of greater monetary autonomy.

4. Citizens in Fragile Economies

In Lebanon or Zimbabwe, stablecoins provide dollar-equivalents when local currencies collapse and banks restrict access.

Losers

1. U.S. Treasury

Reduced global demand for Treasuries may lead to higher yields and borrowing costs. Even partial liquidation of foreign holdings could rattle bond markets.

2. Wall Street & Correspondent Banks

Cross-border payments, a $22T+ industry, has long been intermediated by U.S. and EU banks. Stablecoins and CBDCs are eroding that role.

3. Bretton Woods Institutions

The IMF and World Bank face competition from BRICS-backed alternatives. Commodity-backed reserve tokens could replace dollar-denominated aid and in coming years start to fight for relevance just like the United Nations today

4. MNC Treasury Teams

Multinational corporations now face a more complex FX landscape. Managing 2–3 major currencies is no longer enough. They’ll need systems to handle crypto and CBDCs in real time.

What Comes Next?

We're not heading toward one fixed future, but multiple possible ones:

Scenario A: CBDC-Led Multipolarity

Digital currencies like the yuan, euro, and rupee become interoperable. Nations bypass SWIFT and USD, using digital ledgers under local compliance.

Pros:

Enhanced sovereignty

Real-time global payments

Lower FX dependency

Risks:

Fragmentation of global finance

Interoperability hurdles

Scenario B: Programmable Dollar Reinvention

The U.S. launches a digital dollar (dUSD), embedded with smart contracts and compliance tools, tied to FedNow or blockchain protocols.

Pros:

Retains dollar dominance via tech

Improves oversight and speed

Risks:

Tech debt and rollout delays

Public resistance to surveillance concerns

Scenario C: Hybrid Financial Stack (Most Likely)

This is where I think we already live:

USDT/USDC for retail and P2P

CBDCs for regulated trade

Bitcoin/Ethereum as store-of-value and transactional assets

Fiat remains—but it coexists, not dominates

This isn’t a battle between decentralization and centralization. It’s a competition for trust, speed, and neutrality. The real winners will be platforms that enable seamless, secure, and compliant value transfer across currencies and rails.

Final Reflection

I don’t see the dollar collapsing. I see it being unbundled. For decades, it was both the unit of value and the rail to move it. Now, those roles are splitting.

And in that split lies the opportunity.

Whoever builds the most trustworthy, programmable, and interoperable financial infrastructure—wins. Not because of brute economic strength, but because markets follow usability.

We’re no longer just watching currencies compete. We’re watching systems compete. APIs vs treaties. Protocols vs paper. Decentralized liquidity vs centralized legacy.

The dollar won’t vanish. But it will have to earn its place, just like every other currency on the stage.

And that stage?

For the first time in 80 years, it’s not just political.

It’s also digital.