Newswriters News Desk
A curious consensus has emerged between the rising BRICS powers pushing for de-dollarization and the United States itself: both sides publicly attribute the accelerating shift away from the dollar mainly to Washington’s “weaponization” of its currency. Yet analysts increasingly argue this narrative, while containing a kernel of truth, oversimplifies a far older and more structural trend that predates the 2022 Russia sanctions by decades.
The freezing of roughly $300 billion in Russian central-bank reserves after Moscow’s invasion of Ukraine is routinely cited as the catalyst that convinced emerging-market nations they could no longer treat the dollar as a neutral, apolitical store of value. Chinese officials, Brazilian President Lula da Silva, and South African ministers have all repeated versions of the same refrain: “America turned the dollar into a weapon; now we must protect ourselves.” Ironically, U.S. officials and think-tank commentators often echo the same framing, warning that excessive sanctions risk undermining dollar hegemony and urging greater restraint—thereby implicitly validating the BRICS complaint.
This shared storyline, however, conveniently obscures deeper forces. The dollar’s reserve share has fallen from roughly 71 % in 2000 to 58–59 % today, a decline that began long before anyone spoke of “sanctions weaponization.” China’s deliberate accumulation of dollar reserves to suppress the yuan in the 2000s, the euro’s arrival in 1999, the 2008 financial crisis that exposed U.S. monetary policy spillovers, and chronic American fiscal deficits all eroded trust gradually. Even the SWIFT exclusions of Iran in 2012 and 2018 had already prompted experiments with alternative payment rails.
“2022 was a dramatic accelerant, not the origin,” says Zoltan Pozsar, former Credit Suisse strategist now at Exante Data. “The sanctions on Russia removed the last taboo, but the kindling had been piling up for twenty-five years.”
Critics note that portraying de-dollarization as primarily a reaction to U.S. policy also serves BRICS political purposes: it casts their own cumbersome efforts—gold-backed trade settlements, mBridge, sporadic bilateral currency swaps—as defensive necessities rather than the ambitious (and still incomplete) bid for monetary multipolarity they actually represent.
For Washington, accepting the weaponization narrative may be tactically useful in domestic debates over sanctions reform, yet it risks becoming a self-fulfilling prophecy. If global central banks believe the dollar’s safety is now contingent on U.S. geopolitical benevolence, they have every incentive to diversify regardless of future American restraint.
Thus the paradox: the very episode both sides cite as proof of dollar vulnerability may ultimately matter less than the story they jointly tell about it. Historians may one day record 2022 as the symbolic turning point, but economists are likely to mark the trend as far older—and far harder to reverse than either camp currently admits.
Acknowledgement:
AI tools were used for background research and editorial refinement. All ideas, analysis, and conclusions in this article are solely those of the research team of newswriters.in
