When the west applied sanctions against Russia for its invasion of Ukraine, and China suffered under the imposition of US import tariffs, it was natural for them to consider an alternative to the almighty Dollar as the global reserve currency, and primary currency for international trade: There might even be an opportunity to take the lead with a digital global settlement unit.

The BRICS bloc proposed the creation of the ‘Unit’ as a new monetary system, partially backed by gold and national currencies of BRICS countries. It would be a decentralized financial system, using blockchain technology, and apolitical, making it “immune to political pressures.” The original ambition was to have it adopted by 2025.

The idea of de-dollarization was seductive to the global south, and those who felt disadvantaged by their reliance on the US Dollar, and quickly gained traction. As post-Covid inflation took hold in America and the Dollar weakened, central banks diversified their reserves by buying gold and other currencies. But which currencies? Other than the Euro or Sterling there was not much to choose from. And crypto was just too risky.

And then 2024 happened. Trump got elected. Russian inflation and interest rates soared on the back of sanctions and the cost of war. The Great Stall of China was narrowly avoided by massive stimulus efforts, weakening the Yuan. India, the world’s fastest growing democratic economy, drifted closer to the west. And BRICS+ expanded to include some very undemocratic countries.

With Trump in and inflation down, the Dollar surged, and with it Bitcoin, while gold fell, even in the face of geopolitical uncertainty. The economy trumps everything, and America was back in the driving seat, with a crypto-friendly administration. So much so, that the US established a Federal Reserve for Bitcoin – their answer to diversification of reserves. With oil and AI tech in abundance, American economic exceptionalism continues to rule.

Now the growing movement toward de-dollarization has faltered. The new trend is re-dollarization. That’s where the money is.

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Futureworld works with some of the world’s largest companies and organizations to help them stay relevant in an exponentially changing world. We know that incumbents and market leaders are often poorly placed to take advantage of radically different market forces, and we help our clients to re-imagine their future, and then create game-changing ventures to capitalize on that future. For more information feel free to contact Futureworld Partner Anton Musgrave or the author Doug Vining.