The End of Dollar Hegemony? China's Gold Strategy, America's Crypto Counter, and the Rise of a Bipolar Monetary Order

1. Introduction

The international monetary system may be facing the beginning of an order-altering change, the shift from the https://ipr.blogs.ie.edu/ China’s Gold Counter, and the Rise a potential shift away from the current US dollar hegemony It also examines the US efforts and adoption of stablecoins the current dollar-dominated system, including the dollar’s as well as the benefits these bring to the US through of SWIFT to control foreign assets. However, it among China and other nations. This analysis then reducing its supply of US Treasuries while simultaneously BRICS and the Shanghai Gold Exchange, China aims to lead leveraging economic ties and RMB-based trade and to the dollar system. In response, the US is experimenting dollar-pegged stablecoins. Recent regulation through the This technology aims to increase dollar usage by bypassing for dollars. The paper then offers two sets of proposals. For currency (BRX) leveraging blockchain technology and Authority, backed by a gold-linked RMB and RMB as a foreign reserve. For the US, the paper proposes a infrastructure in target countries to accelerate initiatives do not suggest imminent dollar collapse, but a monetary order. Blockchain. United States dollar’s hegemonic role as the global reserve currency to a potentially bipolar monetary order. Currently, the dollar still maintains a dominant position, holding a majority portion of global foreign reserves while also being used in a majority of international trade transactions. However, recent geopolitical and economic factors have led to an ideological shift away from the United States' influence, manifesting in a shift towards de-dollarisation. This shift, spearheaded by China, could vastly alter global power dynamics, leading to potentially far-reaching geopolitical consequences. China, with its growing economic power and political influence, is spearheading this change in global monetary order through various initiatives. BRICS is their main multi-lateral initiative, as they are collaborating with other strong industrial nations to create a trading network fully independent from the US dollar. China is also leveraging bilateral relations to increase renminbi (RMB) usage, using its global Belt and Road Initiative to encourage RMB-denominated lending and payments. Lastly, China, once the holder of the most US-denominated government debt in the world, has shifted away from this asset in its foreign reserves, continuously decreasing the share of US debt in its foreign reserves since the early 2010s. Through multilateral organizations, bilateral agreements, and internal reserve restructuring, China is pushing hard towards a world where the dollar plays a significantly smaller role in the global economy. Washington, on the other hand, has identified this shift and is reacting accordingly. The United States is currently experimenting with privately owned dollar-pegged stablecoin technology, mainly USDT and Tether. These are being used as a digital dollar by proxy, specifically playing a role in the economies of developing countries with weak or unstable local currencies. Alongside this technology, the government is also pushing regulations to safeguard market confidence, align digital finance with existing institutions, and keep the dollar at the center of global trade and liquidity. The outcome of these opposing efforts from the world’s two economic powerhouses is yet to be seen, as the shift towards a de-dollarised world is in its infancy. However, there are strong indicators that the shift is real and that it could garner significant international support. The emergence of a bipolar economic system could have a significant impact on many geopolitical aspects, potentially leading to a divided world. The previously American- and Western-dominated institutions and financial systems could be challenged by more Sino-centric ones, potentially leading to a battle for global influence between China and the USA similar to that of the Cold War. The shift to de-dollarisation could simply be the beginning of global change. Therefore, is China’s gold-focused and BRICS-led de-dollarisation strategy the beginning of an order-altering shift towards a Sino-American bipolar monetary system, or will dollar hegemony be maintained through stablecoin innovation?

2. Background

The United States dollar (USD) has been the world’s predominant currency in multiple aspects, such as trade and foreign reserves. This hegemonic position has been backed by the United States’ position as the leading global economy. As such, dollar-denominated assets are extremely prevalent in external countries’ foreign reserves, as they are backed by the United States’ consistent economic success. Currently, approximately 58% of global foreign reserves are dollar-denominated assets. Furthermore, the Federal Reserve Board estimates approximately 1 trillion US banknotes are held by foreign investors, with another $220 billion in dollar-backed stablecoins owned externally. Furthermore, over the period from 1999 to 2019, the dollar accounted for 96% of trade invoicing in the Americas, 74% in the Asia-Pacific region, and 79% in the rest of the world. This hegemonic status as a global reserve currency has provided the United States with exorbitant privileges, both financially and politically. Firstly, the USA can leverage its unique position to issue public debt at significantly lower rates. On average, the yield on United States treasury bonds is 60 basis points lower than comparable corporate bond yields. This is despite the United States holding over 100% of its GDP in public debt as of 2024. This difference in yields saves the government approximately 0.7% of its GDP in interest payments annually. Furthermore, the consistent use of the dollar in international trade solidifies demand for the currency, as foreign countries must purchase dollars to purchase commodities such as oil, regardless of US involvement. This means the United States has been able to continue to run an average trade deficit of $594 billion since the year 2000, with this number hitting a peak of $944 billion in 2022, while somewhat maintaining the value of its currency. This occurs as, despite the flood of USD in global markets, consistent demand for it due to debt and international trade balances these market forces, ensuring stability. Lastly, the United States can and has leveraged its unique position to impose sanctions. Since most national wealth reserves are in US-denominated assets, such as government bonds, these can be frozen by the government at will. This is because all dollar-based transactions are made through the SWIFT banking system, which, despite being a European organisation, is under massive pressure from US officials. However, these tremendous benefits reaped by the USA for the century have caught the world’s attention, leading to external pushback and criticism. Since the 2008 global financial crisis, US net foreign liabilities have increased to about 70 percent of the country’s gross domestic product (GDP). Furthermore, US net liabilities are equal to 90 percent of all creditor countries combined. To serve these massive net liabilities, foreign investors expect the country to remain highly profitable and to run a larger trade surplus in the future. Another factor that is shaking previously presumed trust in the currency is the country’s current administration and its tariff and external economic policies. For example, President Donald Trump’s “Big Beautiful Bill” is expected to add trillions of dollars to the US’s debt pile over the coming decade. During the so-called Liberation Day, when the tariffs on most countries around the world were announced, not only was $5 trillion erased from the S&P 500 index, but a significant clear-out of US Treasuries also occurred, leading to decreased prices and a subsequent rise of the cost of borrowing for the US. These economic policies have all led to an erosion in the trust of the dollar, with the stability of the US economy becoming uncertain. This has led many to question the role of the dollar in the current global order, as with the removal of the gold standard, the dollar has essentially become a trust-based currency. The value of the US dollar came from the strong and stable economy that backed it, but this loss of stability and potential poor economic performance is leading to increased speculation on the true value behind it. Furthermore, the recent weaponization of America’s SWIFT payment system and the manipulation of dollar-denominated foreign reserve assets through sanctions has been very controversial. In 2022, the USA leveraged its unique position within the global economy to freeze Russian central bank reserves. They did this by ejecting select Russian banks from SWIFT, meaning they could not access their US-based assets, as they run on the SWIFT payment system. This meant that a significant portion of their wealth was inaccessible and could not be made liquid. In this same year, following the Taliban’s return to power in Afghanistan, the US issued E.O. 14064, freezing about $7 billion of Da Afghanistan Bank reserves at the New York Fed. Half of these funds were then transferred to a Swiss non-profit called “Fund for the Afghan People”, essentially transferring sovereignty over said funds from Afghanistan to Switzerland and an appointed US trustee. All of these sanctions and asset freezes highlighted the vulnerability that countries face when holding US-backed assets as their global reserves. It brings up the question of sovereignty, as while these reserves are technically owned by the respective country, the US can freeze or transfer them at will. Thus, to not become victims of said controls and sanctions and to lessen the grip of Western influence, many countries have begun to consider switching the makeup of their foreign reserves.

3. Discussion of Findings

3.1 China and the “Gold Road” Strategy To accelerate the trend towards de-dollarisation driven by the previously discussed factors, China has initiated a strategy that involves a strong uptick in gold purchasing while diversifying its foreign reserves away from dollar-denominated assets. This strategy extends to BRICS, where it aims to leverage its global collaboration network to establish a prominent and efficient gold transportation network. China had held the position as the largest owner of dollar-denominated debt in the world for many years, using its tremendous trade surpluses to bolster its foreign reserves with US treasuries. At its peak, China owned 1.315 trillion USD in bonds and treasuries in July of

2011. China continued to hold over 1 trillion USD in

foreign reserves throughout the 2010s. However, March 2022 was the last month when this was the case. From March 2022 to March 2024, China’s total holding of U.S. Treasury bonds decreased from 1013.20 billion USD to 767.40 billion. This approximately 25% decrease brought China’s holdings to levels similar to those in 2008, in the early stages of its economic development. The Chinese government has also initiated an intense campaign of gold purchasing. In 2016, China’s gold reserves were 1.76 thousand tonnes. This figure is now 2.3 thousand tonnes as of Q3 2025. This shows a 30.68% increase in 10 years. Furthermore, 2022 saw the beginning of the recent and dramatic uptick in gold purchasing, as Trading Economics reported that gold reserves rose from 1.95 thousand tonnes in Q3 of 2022 to 2.3 thousand tonnes as of today, an almost 18% increase in gold reserves. There is a pattern to both these changes in China’s reserves, as both happened around similar periods. As stated before, 2022 marked a significant shift in de-dollarisation. The sanctions and manipulations of Russian and Afghan assets by the US posed significant concerns regarding the sovereignty of countries over their own wealth, additionally highlighting the US’s favorable position as the owner of the world’s global reserve currency. One of the main responses to these actions was the emergence of BRICS, as well as the collaboration of BRICS and the Shanghai Gold Exchange (SGE) in their efforts to challenge the Bank of England’s position as the leading holder of gold globally. Through its BRICS collaboration and trade ties with many countries, China wants to establish a global vault network to amass as much gold as possible under its sphere of influence. The first step of this plan relies on Saudi Arabia, where they aim to build a Shanghai Gold Exchange International (SGEI) vault. This vault will support the exchange of RMB to gold, aligning with the broader framework of energy cooperation between Saudi Arabia and China. As of 2024, RMB settlements accounted for 15% of China and Saudi Arabia’s trade, which included roughly $58 billion in oil exports. Saudi Arabia may convert its roughly $30 billion in trade surplus with China into gold assets. Secondly, China’s strategy emphasises the construction of a Southeast Asian regional network, connecting different gold delivery houses in ASEAN countries, such as those established in Singapore and Malaysia. Lastly, the third initiative is expanding this gold infrastructure to the Middle East and Africa. Dubai, once Shanghai’s main competitor in gold trading, has partnered with the SGE. Together, they launched a gold contract priced in “Shanghai Gold”, which is in RMB and not USD. This signals a broader shift in pricing benchmarks. The Middle East is important because China aims to settle oil purchases in RMB, shifting away from the petro-dollar. Real initiatives are being taken towards this reality, with core Chinese officials hosting meetings with other important international actors. On September 18th, 2024, Chinese officials officially set the project into motion, introducing the “Gold Road” project and their new measures to optimize warehouse functions to United Overseas Bank in Singapore and MKS PAMP of Switzerland. Furthermore, Hong Kong has announced plans to initiate collaboration with the SGE as well. The SGE International Board has already opened its first offshore delivery vault in Hong Kong and launched Hong Kong-deliverable contracts. Furthermore, Hong Kong plans to build gold storage facilities targeting a capacity of over 2000 tonnes over the next 3 years. Through these initiatives, the SGE is positioning itself as a legitimate competitor to the Bank of England and the London Bullion Market Association, which currently safeguards 5,000 tons of gold reserves and oversees around 90% of global OTC trading, respectively. These initiatives suggest an effort to create a gold-backed international BRICS currency to challenge the US dollar in its use in trade. The gold-backed aspect of this currency is crucial in ensuring trust and encouraging its adoption, as the post-Bretton Woods system enacted after Nixon removed the gold standard in 1971 has been deemed as unfair by Chinese scholars. As mentioned before, the capacity to run large trade deficits, issue cheaper debt, and the overall influence provided by the fiat currency without the restraints of a gold standard have led to cynicism and skepticism regarding the system. It has been described as a system that was “designed from the fundamental interests of Western countries such as the United States, which is unfair to the vast number of developing countries.” Being able to back the BRICS alternative with a tangible asset would surely improve initial trust and willingness to adopt from foreign nations. The United States has recognized the threat that a loss of trust in the dollar poses to its unique and strategic position, and has responded quickly. Their response leverages blockchain and cryptocurrency technology to create a new, more accessible, and more adoptable version of the dollar, which also removes the need for SWIFT, providing an alternative. This has been done through the adoption of dollar-pegged stablecoins. These are cryptocurrencies where each coin is equal to exactly one dollar at all times. They are backed 1:1 by US-denominated assets, those being either liquid dollars or US Treasury bonds. Since the beginning of 2024, the total combined market cap of all stablecoins has almost doubled to around $280 billion, with approximately 99% of this market based on dollar-backed coins. Currently, this market is dominated by Tether and Circle, two private companies whose coins make up over 80% of the total market share. This market has been predicted to grow to approximately $3 trillion in market capitalization in the next three years.

Being a very new and still privately controlled technology, the United States has had to act quickly and create legislation to control and regulate it, which was done recently through the “GENIUS Act”. This legislative act has the stated goals of prioritizing consumer protection, strengthening the US dollar’s reserve currency status, bolstering national security, and “making America the undisputed leader in digital assets”. The main theme of this act was its strict reserve requirements, as it requires 100% reserve backing with liquid assets like US dollars or short-term US Treasury bonds. Furthermore, in the event of an insolvency, the GENIUS Act prioritizes stablecoin holders' claims over all other creditors, ensuring a final backstop of consumer protection. These regulations have a direct impact on both the increased trust and adoption of digital assets, as well as cementing the US dollar’s status as the global reserve currency. However, it is the second goal that relates the most to the specific topic of the dollar and its global reserve status. The requirement for a 1:1 ratio of liquid US-denominated assets per stablecoin ensures a consistent demand for US dollars. As of Q2 2025, the US national debt stock is approximately 36 trillion dollars. This means that if the 3 trillion market capitalization estimate is true, stablecoin reserves could make up almost 8.5% of total US debt. This is a significant portion of debt that would further deepen the US money markets, reinforcing the notion that USD assets are the safest place to park wealth. Additionally, this increase in demand would further decrease the cost of borrowing for the US government, thus incrementing their already high benefits in terms of issuing debt. However, there is another potentially more disruptive benefit of stablecoins. As previously stated, around 99% of the stablecoin market is made up of dollar-pegged assets. However, over 80% of these dollar-backed transactions actually happen outside of the US. This is a very significant opportunity for the currency, as it signifies the potential for it to become an increasingly large portion of global money flows and cross-border transactions. This happens as stablecoins significantly facilitate people’s access to dollars, as anyone with a cell phone and an internet connection can connect to the stablecoin’s blockchain and purchase these assets. Dollarization has already been seen in many emerging markets with unstable currencies, such as Ecuador, Zimbabwe, and Argentina, in the early 2000s. With increased accessibility, many other emerging economies with unstable currencies may opt for dollars as a store of value and medium of exchange. A final main benefit is that stablecoins bypass the SWIFT payment processing system while still being tradeable internationally, meaning they are free from exchange controls, border taxes, and most importantly, international sanctions. Therefore, the proper implementation and regulation of USD-backed stablecoins could strengthen the dollar’s position as the world’s global reserve currency by increasing demand for dollar-denominated assets, providing easy access to dollar-backed assets to people in emerging economies, and removing the fear of sanctions and sovereignty over wealth by bypassing SWIFT.

4. Policy Recommendations

4.1 BRICS Unified Currency and Cross-Border Payment System One of the major issues that the dollar faces when it comes to its international role is the Triffin Dilemma. This dilemma was one of the main reasons the Bretton Woods system collapsed, and states that on one hand, to meet the growth of international trade and the demand for an international medium of exchange and an international reserve currency, the US had to expand the supply of dollars in international markets, thus running a balance-of-payments deficit. On the other hand, the stability of the dollar was crucial to its status in international reserves and trade, and to maintain it, the US government had to run a balance-of-payments surplus. These two requirements contradicted each other, and in the end, the US chose the first option, ultimately increasing the supply of dollars and collapsing the Bretton Woods system. This dilemma is important to take into account as it shows that a gold-backed RMB used for international trade and as a foreign reserve currency is not feasible, as demonstrated by history. Thus, a potential alternative is to create a unified BRICS currency, with a value derived from a weighted average of the exchange rate of all BRICS member states’ currencies weighted according to their volume of intra-BRICS trade. This BRICS currency would be an ideal, non-sovereign currency that would serve as the medium of exchange and as the currency for international settlements. This would consist of a significant portion of international trade, as BRICS+ countries make up 40% of the global economy, accounting for purchasing power parity, in 2024, while simultaneously growing faster than the global average with an average GDP growth of 4%, compared to the world average of 3.3%. This currency would replace the dollar’s current monopoly in international trade and would also ensure independence from Western influence, as it would utilize an independent payment platform. Following the theme of non-sovereignty, the BRICS currency could operate on a decentralised blockchain network, similar to the stablecoins being adopted by the US. This technology offers vast benefits in terms of costs, accessibility, and efficiency. By establishing a blockchain network utilizing the BRICS non-sovereign currency as the medium of exchange, BRICS countries would be able to directly exchange and settle debts in this currency, replacing any reliance on the dollar. Furthermore, a blockchain system removes the reliance on big banks and payment processors to verify and authorize transactions. Instead, the decentralised peer-to-peer payment systems allow users to send money directly to each other. All these transactions would be accounted for in the blockchain ledger, which would provide full transparency regarding the cash flows of the BRICS currency. This removes information asymmetry, ensuring all countries have equal access to financial data. Overall, a BRICS currency blockchain system would allow for independent, secure, and efficient payment channels, which would act as an efficient and attractive alternative to the dollar in international trade. To strengthen the position of this new BRICS basket currency, which could be denominated as BRX, an international and multi-lateral institution would have to be created to manage it. Such an institution could be called the BRICS Monetary and Payments Authority (BMPA). It would be an independent international institution that would issue and manage BRX, operate and maintain the BRICS blockchain network, and maintain the stability and integrity of the system. It would be governed by a board made of financial ministers and central bank governors of BRICS members that would be in charge of setting long-term strategy through a hybrid voting system. It would have an equitable voting system, where each country would have an equally weighted vote. Important rules and guidelines would be established, such as a clear schedule of when the BRX’s value would be updated, clear quantitative thresholds would have to be established, and gradual adjustments would have to be made to avoid shocks. All of these processes and bureaucratic processes would be handled by the BMPA with input from top financial officials of BRICS member states. While challenging the dollar’s monopoly of usage in international trade, the introduction of BRX could also potentially be hugely beneficial in establishing the RMB as a viable and trusted reserve currency through proper implementation. In the scenario of a blockchain-based financial system behind BRX, in order to purchase BRX for trade, central banks would directly purchase BRX at its current exchange rate through an online wallet, transferring the currency directly from the BMPA to the central bank. The BMPA would then take the local currency and convert it into more stable reserve assets, ideally Chinese government bonds. As China is the most influential economy within the multi-lateral organization, accounting for 68.6% of BRICS’s nominal GDP in 2023, the most likely scenario would be that BRX is largely weighted against and backed by RMB and Chinese-denominated assets. Moreover, this would be a move that ensures BRX’s trustworthiness, ensuring that it is backed by strong and reliable government assets instead of local currencies subject to fluctuation. Furthermore, Chinese initiatives in purchasing gold would greatly increase the trust of Chinese assets, as they could become commodity-backed assets. When purchasing Chinese assets, the BMPA would first convert the local currency to RMB and then purchase Chinese government debt. This would bring several benefits to China. Firstly, it would increase demand for RMB, ensuring its value remains high and stable, solidifying its reliability as a reserve asset. It would also likely bring benefits to China’s bond market similar to those seen in the US, allowing China to issue debt at a lower cost. Lastly, China could use the additional debt incurred to continue bolstering its gold reserves, as it still has significantly less bullion than the US. Through this cycle, China and BRICS could enter a mutually beneficial cycle where Chinese gold-backed currencies strengthen BRX’s use in international trade, while BRX’s increased use solidifies the RMB’s position as a reserve currency. While BRICS countries would benefit from this system through various ways, including using a non-sovereign currency and access to gold-backed foreign reserves, China’s dominance within this hypothetical system could raise similar concerns of privilege seen today with the United States. While RMB-backed assets’ outsized role within BRX compared to other member reserves is proportional to economic activity, it still may be seen as a challenge to BRX’s non-sovereign status. China’s influence could be seen as a threat, as well as a potential area for abuse. Thus, countries would have to weigh their options, viewing the positives and negatives of the Chinese-led versus the United States-led systems and decide which to adopt and utilise. In conclusion, through the creation of BRX, an intra-BRICS currency used for international trade and settlements among BRICS members, the dollar’s role in the international financial system could be significantly reduced, while the RMB’s role as a reserve asset could be improved. By leveraging blockchain and stablecoin technology similar to that being popularized now in the US, as well as gold-backed Chinese government bonds, BRX could become an easily accessible, widely used, and fully non-sovereign asset. BRX’s increased popularity and widespread adoption would further fuel China’s accumulation of gold, creating a reinforcing loop where both BRX and the RMB become more valuable and trustworthy. 4.2 The USA and Promoting Federal Reserve-Issued Stablecoin Internationally As discussed, the US government seems very optimistic about stablecoin technology, viewing it as an efficient method of spreading USD influence. To further promote its usage and increase its effectiveness in maintaining dollar dominance in the international financial system, the US could design a Fed-issued stablecoin and promote its usage through the World Bank funding initiatives, implementing stablecoin usage infrastructure in countries with remittance-reliant economies and countries with unstable currencies. Currently, almost 90% of stablecoins are used for cryptocurrency trading and do not reflect real economic activity. However, stablecoin usage for remittances is seeing quick adoption, with US survey data showing 26% of remittance users had already tried stablecoins, and a further 28% of Nigerian internet-using adults, along with 12% of Argentinians having tried it as well. This shows the demand for stablecoin usage in both remittances and high-inflation countries, suggesting a lucrative opportunity for the US. The first part of this plan is to create a Fed-issued and backed stablecoin. This would be a fully reserved stablecoin, meaning each stablecoin token would be backed by a real and liquid dollar. This could either be done through the creation of a fully new token and blockchain, or by purchasing Circle and Tether and taking over their assets while also rebranding the token. Currently, Tether and Circle have a duopoly of the market, which raises several issues. Firstly, they are private companies, meaning they are less transparent and thus could be considered less trustworthy. This is crucial as cryptocurrencies are a controversial topic, as many scandals, such as FTX, have led to a decline in the reputation of the industry. A 2024 PEW research study found that 63% of adults had “little to no confidence” that cryptocurrencies were reliable or safe investments. An official, Fed-issued alternative would be backed by the state, strengthening trust. Furthermore, with the GENIUS Act legislation, Circle and Tether must back the stablecoins with either cash or short-term treasury bonds. The issuance of short-term bonds means the US would have to pay interest payments to fund the issuance of these stablecoins. However, a Fed-issued alternative could be backed 100% by liquid dollars, thus lowering the cost of issuance by removing interest payments and simultaneously guaranteeing instant liquidity of stablecoins. This would help the US reduce its debt burden, a priority for the current administration. Of course, Congressional backing would be crucial in ensuring legal clarity and authorizing the Fed to issue the token. The legal process would ensure the token’s compliance with all regulations within the GENIUS Act, as well as ensuring compliance with any future changes in regulation. The next part of the plan revolves around collaboration with the World Bank. The World Bank is an organisation heavily influenced by the US, with the president of the World Bank always nominated by the US government, as well as having a US Executive Director within the organisation that holds 16.22% of voting power, the most of any country by far. With this influence, the US could push a dollar-adoption program where the World Bank targets remittance-reliant and unstable-currency countries and funds infrastructure projects to accelerate stablecoin adoption as a reliable and accepted medium of exchange within the local economy. The first part requires proper identification of countries with remittance-reliant or unstable-currency economies. There would have to be a specific classification framework, perhaps an independent label for both remittance-reliant and unstable-currency countries. Countries where remittances consist of over 10% of their GDP or where the foreign exchange (FX) value of the currency depreciated over 15% could be marked as “high-risk”, being prioritised for intervention. These labels are relevant as both these scenarios encourage stablecoin adoption. Remittances paid through stablecoins avoid potential SWIFT delays, banking fees, and situations like Cuba, where many remittances are transported illegally in cash from Florida to avoid stringent capital controls. For countries with volatile FX-valued currencies, stablecoins offer a stronger store of value for their wages and wealth, with the added benefit of being a very accessible and easy-to-use technology. Once the countries are identified, infrastructure initiatives, funded through the World Bank, will be put into place, with the stated goal of promoting stablecoin adoption and usage within local economies. This aligns with the remittance and FX-related benefits, as stablecoin adoption would only seem reasonable if they can then be used and accepted consistently throughout the local economy. Digital wallets and QR code mobile networks for stablecoin payment and receiving could be integrated, helping consumers build their wallets and access the blockchain, while connecting merchants and local businesses to the network by allowing them to receive stablecoin payments. The World Bank could also support heavily regulated exchanges to offer seamless conversion between the Fed-issued stablecoin and the local currency. Lastly, educational campaigning could be carried out, with the goal of teaching local citizens and businesses about the benefits of Fed-issued stablecoin adoption, as well as the safety of the asset through government backing, easy convertibility, and strong regulations. Lastly, to entrench stablecoin adoption and ensure countries’ willingness to adopt, the messaging and geo-economic narrative behind the projection must be diligently designed. This is because dollarisation poses significant risks to local economies. According to the International Monetary Fund, another largely US-influenced multi-lateral financial organization, dollarisation can drain bank deposits and increase macro-financial volatility. Therefore, the messaging must be positive, focusing on the benefits to individuals and business activity. For remittance-reliant economies, the messaging should focus on the ease of access and convertibility and fee-less international transactions, all proven to be important enough to encourage its use, as seen in the 26% adoption rate previously. For FX-risk countries, the focus should be oriented towards wealth-building opportunities, as their savings would not be subject to the rapid devaluation eroding their current wealth. Both points would encourage citizen adoption, hopefully spurring legislation and government approval for adoption through public pressure and propaganda. In a broader geopolitical sense, this project could also be framed as “economic collaboration” between the local economy and the USA, promoting US-endorsed values of free-market libertarian economic ideals. Overall, this plan could be beneficial in promoting dollar usage and entrenching its place in global finance while simultaneously strengthening and defining the USA’s global sphere of influence. Through the creation of a Fed-issued, well-trusted USD-pegged stablecoin and its adoption through World Bank-led initiatives in primed countries, this stablecoin could be adopted in local economies for day-to-day transactions between local citizens and businesses. This would further strengthen the dollar’s influence by creating a new, strong force of demand that could secure its place in the global financial world.

5. Conclusion

In conclusion, this paper discusses the current de-dollarisation movement, the causes and motivations behind it, and the main players aiming to accelerate it. While the shift is still in its infancy, China’s gold-anchored, BRICS-centric ecosystem that leverages its massive government and trade surpluses presents a challenge to dollar hegemony. However, the US has already responded through a technology-based solution, experimenting with stablecoin technology as a digital extension of the dollar, strengthening its role in foreign economies and potentially accelerating dollarisation in foreign countries. As it stands, both initiatives are in their infancy. China is far from the global leader in gold reserves, BRICS is still unstable and far from creating and implementing a non-sovereign asset, and the global vault network is just getting started. Stablecoins are also in their infancy, with the GENIUS Act, the first meaningful piece of legislation, passed only four months ago. This means we’re only witnessing the beginning, and real changes may develop within the next five to ten years. However, these initiatives suggest the rise of a shift in global influence, with the US dollar’s hegemonic position being challenged. Not only does this signify a potentially bipolar global financial system, but also a potential shift in the global order, with China creating its own sphere of influence, potentially challenging the US and the West.