There’s a global shift happening around the U.S. dollar, and it’s being recognized by major institutions—not crypto Twitter.
Standard Chartered’s Global Head and Geopolitical Analyst, Philippe Dauba-Pantanacce, recently explained that many emerging markets, especially BRICS nations, are actively working to reduce their dependence on the dollar. Sanctions, the removal of Russia from SWIFT, and the political use of the dollar have pushed countries to build alternatives.
But he made one thing clear: the dollar isn’t dying—it's evolving.
And 2025 is a perfect example of how complicated this shift really is.
The Dollar Weakened in 2025—but Weak Doesn’t Mean “Dead”
This year, the U.S. dollar fell out of the top seven strongest currencies globally.
The DXY index, which tracks the dollar against a basket of major currencies, dropped:
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over 6% year-to-date,
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repeatedly failed to stay above the 100 mark,
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and spent long stretches in the 97–98 range.
Currencies now stronger than the USD include the Kuwaiti Dinar, Bahraini Dinar, Omani Rial, Jordanian Dinar, British Pound, Cayman Islands Dollar, and Swiss Franc.
So yes—the dollar slipped.
But it’s still the 8th strongest currency in the world, which reinforces the idea that the dollar can weaken without losing its position at the center of global finance.
Japan Just Added a Twist: The Reverse Carry Trade Is Ending
For decades, Japan quietly powered global liquidity by keeping rates near zero.
That allowed banks worldwide, especially in China, to borrow yen extremely cheaply. This “reverse carry trade” helped:
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support yuan stability
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fund BRICS trade settlement
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make non-dollar trade rails easier to run
Now Japan is raising rates for the first time in a generation.
That means the cheap yen funding pipeline is tightening.
When China loses cheap yen borrowing:
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yuan liquidity shrinks
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BRICS settlement becomes more expensive
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alternative rails become harder to maintain
The timing couldn’t be more symbolic: just as BRICS pushes de-dollarization, one of its quiet financing lifelines is getting more expensive.
So What’s Actually Happening? A Split World, Not a New One
Dauba-Pantanacce’s insight captures the situation perfectly:
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Yes, de-dollarization is real.
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Yes, the dollar weakened this year.
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Yes, countries are diversifying because of geopolitics.
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But the dollar still anchors global finance, especially when liquidity tightens.
And Japan’s move shows why.
When yen funding dries up, capital flows back toward U.S. assets.
When the yuan weakens, traders hedge in dollars.
When BRICS tries to build alternatives, those alternatives still rely on the USD at key points.
That’s the paradox the world is entering.
The Bottom Line
2025 revealed a lot:
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The dollar weakened on the DXY, slipping to 8th place globally.
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BRICS nations accelerated their efforts to reduce dollar dependence.
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Japan began raising rates, squeezing the cheap liquidity that supported the yuan and BRICS trade.
Yet through all of this, the same conclusion remains:
The world is not replacing the dollar—it's learning to work around it.
And every time liquidity tightens, the dollar becomes the safe harbor again.
This is the real Dollar Shift:
A more multipolar system forming around an evolving—but still central—U.S. dollar.