BRICS central banks buying gold de-dollarisation

Is the US Dollar Losing Dominance? What IMF Data Shows

May 11, 2026 Zara

For most of the past 80 years, the answer to almost every question in global finance was the same dollars.

Countries held dollars as reserves. Markets priced oil in dollars. International loans were denominated in dollars. When a business in Vietnam wanted to buy machinery from Germany, both sides setteled the transaction in dollars, even though neither country was American.

That arrangement, known as dollar dominance, built the post-war global economy. And it made the United States extraordinarily powerful. When Washington wanted to punish a country financially, it could simply cut off their access to the dollar system. When the US needed to borrow money, the world lined up to lend.

But something is shifting. According to IMF data, the US dollar’s dominance in global foreign exchange reserves has fallen below 57% for the first time since 1995, down from a peak of 72% in 2001. Gold prices are being forecast toward $4,000 per ounce as central banks diversify away from dollar-denominated assets. And countries from Brazil to Saudi Arabia are exploring ways to trade without the dollar at all.

The idea of US dollar losing dominance is no longer theoretical the shift is already visible in official IMF data. The debate now is how far it could go, and how fast.

What the IMF Data Actually Shows

By the numbers: Dollar share of global reserves: 72% (2001) → 57% today, per IMF data. Central banks bought 1,045 tonnes of gold in 2024 third straight year above 1,000 tonnes. China’s CIPS payment system: now used by 4,900+ banking institutions across 187 countries. Dollar’s share of daily FX trading: still 89% dollar dominance is eroding slowly, not collapsing.

The Dollar’s Fall from 72% to 57%

The most honest place to start is the IMF’s reserve data, because it cuts through the noise on both sides of this debate.

In 2001, 72% of the world’s foreign exchange reserves were held in US dollars. By the end of 2024, that figure had fallen to 57.8%, according to the IMF’s COFER database. The Q2 2025 data showed a further sharp decline, with the euro emerging as a primary beneficiary. A separate analysis published in Fortune Magazine described the current situation as ‘different from anything in the past 80 years of dollar dominance.’

That 15-point drop over two decades sounds gradual. But as one economist quoted by Fortune put it: ‘The erosion is slow, percentage points per decade rather than per year. But it compounds.’

What is accelerating the decline is not any single event. It is a combination of things happening simultaneously and the US itself is partly responsible. Every time Washington uses financial sanctions as a geopolitical weapon, it reminds every other country what it feels like to be on the wrong side of dollar dependency. That lesson is not being forgotten.

Why Countries Are Walking Away From the Dollar

The short answer is: because they have been given reasons to.

When the US and EU froze $300 billion in Russian central bank assets after the 2022 invasion of Ukraine, central banks worldwide took note. If Russia’s reserves could be frozen, reserves held in Western financial institutions, denominated in Western currencies, then any country that had a disagreement with Washington was theoretically at the same risk.

That realisation has driven two shifts. First, central banks are buying gold at a pace not seen since the 1960s. The World Gold Council reports that central banks purchased 1,045 tonnes of gold in 2024 the third consecutive year above 1,000 tonnes, and more than double the annual average from 2010 to 2021. Poland bought 90 tonnes. Turkey bought 75 tonnes. India bought significant quantities. None of these countries is hostile to the West, they are simply diversifying.

Second, countries are building payment systems that bypass the dollar entirely. China’s Cross-Border Interbank Payment System CIPS now connects more than 4,900 banking institutions across 187 countries, according to JP Morgan’s de-dollarisation analysis. In 2025, CIPS processed transactions worth approximately $25 trillion in annual volume up 43% from the previous year. That is still a fraction of SWIFT, but the growth rate is impossible to ignore.

What BRICS Is Actually Doing And What It Isn’t

If you read Western headlines about BRICS and de-dollarisation, you might expect a common BRICS currency to be launching any day now. The reality is more complicated, and more honest than either side admits.

At the BRICS summit in Rio de Janeiro in July 2025, according to CADTM’s analysis, no concrete agreement on a common currency was reached. India’s Foreign Minister S. Jaishankar was blunt: ‘India has no policy to replace the dollar. The dollar as the reserve currency is the source of global economic stability.’

So the dollar’s dominance is weakening, but not because BRICS has some grand unified plan.

It is losing dominance because dozens of countries are making individual decisions, independently, to reduce their exposure. Russia and China settle around 90% of their bilateral trade in rubles and yuan, according to industry reports. mBridge, a digital currency platform connecting central banks in China, Hong Kong, Thailand, and the UAE, enables instant cross-border payments without touching the dollar at all.

The change is happening gradually rather than all at once, and it is driven by self-interest, not ideology.

Dollar Dominance Today A Realistic Picture

Here is where the dollar actually stands across different measures, based on the latest available data:

Measure	Dollar Share	Trend	What It Means
Global FX reserves	~57%	📉 Falling	Down from 72% in 2001 still dominant but declining
Daily FX trading	~89%	➡️ Stable	Dollar still involved in almost all currency transactions
Trade invoicing	~40-50%	➡️ Stable	Little erosion dollar still the default for global trade
Oil contracts	Declining	📉 Falling	More oil now priced in yuan, especially China-Saudi trades
Central bank gold	9% of EM reserves	📈 Rising	More than double the 4% seen a decade ago
CIPS transactions	$25 trillion/year	📈 Rising fast	43% growth in 2024 alternative to SWIFT building scale

Sources: IMF COFER database, BIS Triennial Survey, JP Morgan, World Gold Council, Fortune.

But the Dollar Isn’t Going Anywhere Not Yet

Anyone who tells you the dollar is about to collapse is overstating the case. The data does not support that.

The BIS 2025 Triennial Survey, the most comprehensive measure of global currency usage found the dollar on one side of 89.2% of all foreign exchange transactions in April 2025. That is actually up from 88.4% in 2022. Daily FX trading hit $9.6 trillion, and the dollar’s transactional share increased. The Chinese yuan, despite significant growth, accounted for just 8.5% of FX transaction meaningful, but a fraction of the dollar’s reach.

The US Treasury market remains the world’s deepest and most liquid sovereign debt market. No alternative comes close. The yuan faces fundamental constraints: China’s capital account is not fully open, which limits the yuan’s usability for international investors. And the institutional and legal trust that underpins dollar-denominated assets decades of rule of law, transparent markets, reliable contracts cannot be replicated quickly.

So the honest picture is this: the decline in dollar dominance is visible in reserve data and commodity markets, but not yet in daily transactions or global trade invoicing.

It is a slow structural shift, not a sudden collapse.

What This Means for Pakistan

For Pakistan, this story is not abstract geopolitics. It is directly relevant to the economy’s most persistent vulnerabilities.

• Dollar shortage problem: Pakistan has repeatedly faced foreign exchange crises driven by a shortage of US dollars. If alternative payment systems like CIPS, mBridge, or BRICS Pay become more accessible, Pakistan could potentially conduct more trade in yuan, dirhams, or rupees reducing dependency on dollar reserves that are always in short supply.

• IMF and dollar-denominated debt: A significant portion of Pakistan’s external debt is dollar-denominated. A weaker dollar would reduce Pakistan’s real debt burden. A stronger or more dominant dollar which remains the more likely short-term scenario makes that debt harder to service.

• China-Pakistan trade via CIPS: CPEC-related trade between Pakistan and China could increasingly be settled through CIPS rather than SWIFT, reducing transaction costs and exposure to potential US financial pressure. This connects to the broader shift in how Pakistan’s trade ties with the Gulf and Asia are evolving

• Remittances: Pakistan receives over $30 billion in annual remittances mostly in dollars. Any meaningful shift away from dollar-based transfers would require new infrastructure. In the short term, this remains a reason Pakistan has a direct interest in dollar stability.

The Uncomfortable Truth for Washington

The deepest irony in this story is that the US has accelerated the very process it wants to prevent. Every time Washington freezes assets, cuts a country off from SWIFT, or weaponises the dollar system as a geopolitical tool, it adds to the list of reasons why other countries want an alternative.

A November 2025 analysis published by Cambridge University Press warned that US sanctions could create a bifurcated global economic system with the US and its allies on one side, and China and BRICS countries on the other. ‘The erosion is slow,’ said one economist quoted by Fortune. ‘But it compounds.’

The question for the US is not whether dollar dominance will decline further, it almost certainly will. The question is whether Washington can manage that decline gradually, or whether its own policy choices will accelerate the process faster than policymakers expect. This connects to everything we cover at TalkToGlobe about how global economic power is shifting in this decade.

So, Is the Dollar Finished?

No. Not even close.

But the US dollar is slowly losing dominance in parts of the global financial system…

And in ways that are now visible in official IMF data. The world is not replacing the dollar. It is building alternatives, hedging its exposure, and quietly reducing the percentage of its reserves and trade that depend on a single currency controlled by a single country.

That process will take decades. The dollar will remain the world’s primary reserve currency for the foreseeable future. But the unchallenged, unipolar dollar dominance of the 1990s and 2000s is not coming back.

Follow TalkToGlobe for continuing analysis of how shifts in global finance are reshaping trade, investment, and economic power.

Frequently Asked Questions

Is the US dollar losing its dominance?

Yes, gradually. According to IMF data, US dollar losing dominance in global foreign exchange reserves, falling from 72% in 2001 to below 57% today, the lowest level since 1995. Central banks are diversifying into gold and alternative currencies. However, in daily FX trading and trade invoicing, the dollar remains overwhelmingly dominant, involved in around 89% of all currency transactions. The decline is real but slow percentage points per decade, not per year.

What is de-dollarisation?

De-dollarisation refers to the process by which countries reduce their reliance on the US dollar for international trade, reserves, and financial transactions. It involves central banks diversifying reserves into gold and other currencies, conducting bilateral trade in local currencies, and building alternative payment systems like China’s CIPS that do not route through the dollar-based SWIFT network. De-dollarisation does not mean the dollar disappears, it means its dominant share of global finance gradually declines.

Why are countries moving away from the US dollar?

The primary driver is the US use of financial sanctions as a geopolitical weapon. When the US and EU froze $300 billion in Russian central bank assets in 2022, every other country saw what was possible. Central banks began diversifying into gold and building alternative payment infrastructure. Beyond sanctions risk, China’s growing economic weight and its push to internationalise the yuan through CIPS has also provided a practical alternative for countries that trade heavily with China.

Will BRICS replace the US dollar?

Not in the near future. US dollar losing dominance in reserves is happening, but not in daily transactions. At the BRICS summit in July 2025, no agreement on a common currency was reached. India explicitly stated it has no policy to replace the dollar. What BRICS is doing is building parallel payment infrastructure BRICS Pay, mBridge, CIPS connections, that allows member countries to trade without using the dollar. This reduces dollar dependency at the margins but does not replace dollar dominance in global finance.

What does dollar decline mean for Pakistan?

For Pakistan, a gradual US dollar losing dominance has mixed implications. On the positive side, alternative payment systems like CIPS could allow Pakistan to settle China-Pakistan trade without needing scarce dollar reserves, addressing one of Pakistan’s most persistent economic vulnerabilities. New BRICS-adjacent trade routes could reduce transaction costs. On the negative side, Pakistan’s external debt is heavily dollar-denominated, and the country depends on dollar-based remittances from the Gulf. Short-term, dollar instability creates more risk than opportunity for Pakistan. Read more: Pakistan’s economic ties with the Gulf in the current geopolitical environment

Is China’s yuan replacing the dollar?

Not yet. The yuan accounted for 8.5% of global FX transactions in 2025 meaningful growth, but still a fraction of the dollar’s 89% share, according to JP Morgan’s research. The yuan faces fundamental constraints: China’s capital account is not fully open, limiting international usability. However, China’s CIPS system is growing rapidly 43% volume growth in 2024, and bilateral yuan-ruble trade between China and Russia now bypasses the dollar entirely. The yuan is becoming a regional reserve currency, but a global dollar replacement is decades away.

What is CIPS and how does it threaten dollar dominance?

CIPS, China’s Cross-Border Interbank Payment System is an alternative to the SWIFT messaging network that underpins most international bank transactions. By March 2026, CIPS connected more than 4,900 banking institutions across 187 countries, processing approximately $270 billion in transactions in a single month. Unlike SWIFT, CIPS routes transactions through Chinese infrastructure and is not subject to US financial oversight or sanctions enforcement. Its rapid growth, particularly among countries that trade heavily with China is the most concrete manifestation of financial de-dollarisation currently underway.