The future of trade and investment: What happens when the Dollar’s not in the middle?
Peter McGahan
Monday 2nd June, 2025.
PART 10 in our series: The Global Shift Away from the US Dollar.
For most of our lifetimes, global trade has worked like this: if you’re selling oil in Brazil, or importing fertiliser in India, you price it in dollars. Even if the buyer and seller had no connection to the US, the greenback was the middleman. Trade cleared through US banks, contracts were written under New York law, and if something went wrong, Western courts had the final say and a field day. Nice if you can get it.
It was enforced upon others. For decades, it worked because everyone trusted it, or just couldn’t break into an alternative.
Not anymore.
Over the past two years, that foundation has cracked, not in one dramatic collapse, but in a quiet shift which is now gathering speed. Countries are rewriting how they trade with each other. And they’re doing it without the dollar.
Let’s start with what’s happening between countries. Trade agreements are no longer defaulting to dollar payments. China is settling oil deals with Saudi Arabia in yuan. India is buying goods from Russia in rupees. China–Brazil, India–Russia, Iran–China, and Saudi–China is settling oil, fertiliser, and machinery trade in non-dollar currencies.
Brazil and China are swapping their own currencies for bilateral trade. Even the UAE and India, two long-time dollar users, signed a deal to trade in rupees and dirhams in 2023.
Why? Because they don’t want to be vulnerable to sanctions or US interest rate swings. And after the freezing of Russian reserves in 2022, they’re no longer convinced that holding or using dollars is safe.
This shift isn’t just about the money itself - it’s about the pipes the money runs through. SWIFT, (the global messaging system for banks), used to be the only guys in town. But now? China has built CIPS (Cross Border Interbank Payment System), its own settlement network with over 1,400 banks across 110 countries. A new
platform called mBridge is piloting cross-border payments using digital versions of local currencies. No dollars, no US banks, no SWIFT.
Trade contracts are changing too.
New deals between countries increasingly cut out legal clauses which used to tie them to New York or London courts. That means fewer Western legal hooks, fewer defaults triggered by dollar liquidity problems or political pressure.
Now, what does this mean for investors and businesses?
Here’s the bit which matters: if trade is no longer cleared in dollars, then the demand for dollars starts to fall. That has a knock-on effect. Central banks begin holding more gold, more yuan, more local currencies. Some even add tiny amounts of crypto or Special Drawing Rights. And as they shift, so does the flow of global capital.
We’re already seeing signs: countries like India, Brazil, and Saudi Arabia are issuing more debt in their own currencies. They’re less interested in dollar-based finance, and more in funding trade and infrastructure on their own terms. And sure, why not?
For global investors, this means two things. First, diversification no longer just means holding some non-US stocks. It means thinking outside the dollar system entirely, different currencies, different courts, different rails. Second, the old rules of safe havens are shifting. Gold and non-dollar government bonds are being reassessed. And long-standing assumptions about US Treasuries as the ultimate safe asset? Not as certain as they used to be.
If your country doesn’t want to be told who it can sell to or what currency it must use, it needs options. And those options are being built/already built.
Is the US Dollar’s status as global reserve currency under threat? Yes, but not by a single rival, and not overnight. We’re moving from a single-system world to a dual one. One where Western economies may still use dollars, SWIFT, and US courts, and another, emerging system where trade flows through new pipes: yuan, rupees, digital tokens, bilateral deals, and with local arbitration. The IMF has acknowledged the fragmentation of reserve currency dominance in several policy papers since 2022, by the way.
The future of trade is not about one currency replacing another. It’s about building a system which doesn’t rely on permission from the Dollar boys, one which keeps flowing even if all the geopolitical winds change.
That future is already well plumbed in.
To understand the whole structure of dedollarisation, I’m creating a complimentary factsheet which you can register for by emailing info@wwfp.net but if you have a question on the subject, also send me an email to this address also.
Peter McGahan is the Chief Executive Officer of Independent Financial Adviser Worldwide Financial Planning. Worldwide Financial Planning is authorised and regulated by the Financial Conduct Authority.
