The US dollar remains the primary global reserve currency and the most widely used unit of account for trade, funding and cross‑border transactions, according to a recent market analysis. While the United States’ share of worldwide trade has slipped over the past three decades, the dollar’s transactional dominance persists in foreign‑exchange turnover, trade invoicing and international debt issuance.
J.P. Morgan analysts note that a genuine decline in the dollar’s structural demand – termed de‑dollarization – would require a sustained shift away from the greenback in these core areas. Current data, however, show limited evidence of such a shift. Central banks are gradually reducing holdings of US Treasury securities; the amount of Treasuries in the Federal Reserve’s custodial accounts for foreign officials has fallen to levels last seen in 2012. At the same time, the World Gold Council reports a record 45% of central banks expect to increase gold reserves over the next year, and 74% anticipate lower dollar holdings within five years.
Private‑sector demand for dollars continues to rise. Record inflows into US equities and high‑grade corporate bonds – the latter at three times the pace of the previous year – underscore the ongoing attractiveness of dollar‑denominated assets. The analysis also highlights that a disproportionate share of global clearing runs through US‑linked infrastructure, meaning many transactions, even those between non‑US parties, ultimately transit the dollar system.
Geopolitical leverage remains a key benefit of the dollar‑centric framework. The United States can impose sanctions, shape access to payment channels and monitor transactions that clear through US‑based systems. Yet the analysis warns that this leverage is eroding as countries develop alternative payment rails and learn to circumvent sanctions.
China’s efforts to increase yuan usage provide the most visible counter‑trend. The share of China‑originated goods settled in yuan rose to roughly 28% in 2025, up from about 12% in 2018. Additionally, the BRICS bloc has floated the idea of a common currency to reduce reliance on the greenback, although no scalable alternative has yet emerged.
Overall, the analysis concludes that suggestions of an imminent dollar demise are premature. The depth of US capital markets, the lack of a viable substitute and the entrenched role of the dollar in reserves, payments and financing keep it dominant, while future geopolitical developments could gradually shift the system toward a more multipolar monetary order.
