It Started: China Is Dumping The US Dollar

TL;DR

China and other nations are actively reducing dollar dependence through alternative payment systems, accelerating a decades-long shift away from US financial dominance.

Key Points

• 1.The US dollar's global reserve share has dropped sharply. Central banks held 65% of reserves in dollars in 2016; by 2025 that fell to ~57%, an 8-point decline in under a decade — and the rate is accelerating.
• 2.China has halved its US Treasury holdings and built dollar bypass infrastructure. From 40% of reserves in US Treasuries in 2010 to ~20% by 2025, China also launched CIPS (cross-border interbank payment system) to transact in digital yuan, plus joined Mbridge blockchain and BRICS Pay.
• 3.Five concrete de-dollarization mechanisms are already operational or in testing. These include bilateral trade settlements (China/India/Russia), record central bank gold purchases, BRICS Pay, the Mbridge blockchain (China, UAE, Saudi Arabia, Thailand), and the Unit — a proposed 40% gold / 60% BRICS-currency digital settlement token.
• 4.Goldman Sachs projects China overtakes the US economy by 2035, with India becoming a third $10 trillion economy by 2036. BRICS nations already represent 45% of global GDP by purchasing power vs. 30% for Western nations, and emerging markets could hit 50% of the global stock market by 2050.
• 5.Major institutions now forecast international markets outperforming US stocks for the next decade. Vanguard projects US stocks at 3.9–5.9% annually vs. international at 4.9–6.9%; JP Morgan sees ~7% in emerging markets; Fidelity estimates 8%+ over 20 years — driven by lower valuations and a weakening dollar boosting foreign returns.
• 6.The dollar isn't collapsing — it's diluting — and the investment playbook is diversification, not panic. The dollar still handles 89% of FX transactions and 49% of Swift payments; recommended hedges include international index funds, emerging markets, a small precious metals allocation, and commodities, while keeping meaningful US exposure.