Dollar Dominance Fades: Asia Turns to Local Currencies and BRICS Bloc

Across Asia, the U.S. dollar is rapidly losing ground as countries intensify efforts to reduce reliance on the greenback.

With the dollar down over 9% against a basket of major currencies, a powerful combination of BRICS coordination, local currency initiatives, and rising hedging costs is accelerating the region’s shift toward alternative monetary strategies.

This isn’t a sudden pivot—it’s the culmination of a trend more than a decade in the making. According to Bloomberg analyst Stephen Chu, the early seeds were planted in 2014 following geopolitical tensions between Russia and the West. That period marked the beginning of Russia shedding U.S. Treasury holdings—a move later mirrored by China and other economies wary of financial entanglement with the United States.

What began as a slow drift is now turning into a systemic shift. The dollar’s share in global foreign exchange reserves has been slipping, and recent market behavior reflects a growing loss of confidence. Chu notes that markets are now showing fatigue with U.S.-centric trade tensions and erratic tariff policies. The result? A rare synchronized pullback from U.S. assets, including dollars, bonds, and equities.

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One of the clearest signals of this transition came from Taiwan. In a striking move, the Taiwanese dollar jumped over 10% within just two days—a surge driven not by retail traders but by institutional shifts. Taiwanese life insurance firms, which collectively manage over $700 billion in foreign investments, have begun dumping dollar-based assets due to skyrocketing hedging costs. With some hedge rates climbing into double-digit territory, holding USD-denominated assets no longer makes economic sense for many large players.

“This is a structural change,” Chu explained, highlighting that the region is no longer grappling with dollar debt burdens like in the past—but with the risks of holding too many dollar assets. That reversal marks a profound transformation in the way Asian financial systems relate to the global reserve currency.

As BRICS nations continue to develop frameworks for settling trade in their own currencies, and as local economies gain confidence in their monetary independence, the de-dollarization movement in Asia appears to be entering a new phase—one where the dollar is no longer seen as the only safe harbor.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.