-Sam Ahmed
As countries pursue digital alternatives and build new trade rails, the early signs of de-dollarisation are beginning to take shape.
Countries across Asia and the Global South are quietly redrawing the contours of global finance amid growing geopolitical tensions and economic volatility. The increasing use of sanctions, tariffs, and extraterritorial financial controls by the United States has raised growing unease over continued reliance on the US dollar. Once viewed as a stable and liquid medium of exchange, it is now increasingly seen as a source of volatility and a means of oversight which goes beyond the control of sovereign nations and global corporations.
Several governments have been adopting prudent measures to decouple from external shocks, volatility and uncertainty that increasingly characterise today’s global marketplace. The strategy has been to build alternative trading blocs and payment corridors with like-minded partners committed to maintaining cross-border trade and commerce — supported by emerging technologies, such as blockchain and digital currencies.
These offer advantages: low cost, real-time settlement, and for some countries, the ability to sidestep politically driven restrictions tied to the dollar and legacy dollarclearing infrastructure, which allows the US government full visibility on global dollarbased transactions.
A notable example of an alternative trading bloc is the Brics grouping, which now comprises ten countries. China’s trade with fellow Brics nations surpassing US$648 billion underscores the bloc’s growing economic heft. Now among the world’s largest trade alliances, the grouping is also exploring the launch of a digital currency, potentially backed by member-state central bank digital currencies (CBDCs) and commodities such as gold.
On the crypto front, Bitcoin and Ether have reportedly been used in select oil transactions between Russia and India. And then there is Project mBridge — a collaboration between the central banks of China, Thailand, Hong Kong and the UAE — that is now enabling cross-border settlements using CBDCs. While still in its early stages, the building blocks of the imminent shift away from the dollar appear to be gaining momentum.
Countries are also connecting their domestic payment systems to facilitate faster, dollarfree transactions. For instance, India and Singapore have linked their instant payment systems, allowing for seamless Rupee–Singapore dollar transfers. India has also established a real-time payment corridor with the UAE for energy transactions — a landmark step that sidesteps the US dollar in oil trade.
But beyond these state-led initiatives, for blockchain and cryptocurrency purists — those who dream of a day when the US dollar and the complex machinery of traditional finance, with its banks, correspondent banks, custodians, clearing houses and central banks, are replaced by decentralised, transparent and borderless digital platforms — the wait will be long, and possibly disappointing.
To be sure, replacing the dollar won’t be easy.
In the short to medium term, it remains deeply entrenched: 88 per cent of all global foreign exchange transactions still involve the US dollar, thanks to its immense liquidity, trust and established infrastructure. That said, its role as a reserve currency is already slipping — falling from 64 per cent in 2016 to 57 per cent today. Central banks are quietly diversifying away from the mighty greenback.
This shift raises two key questions. Is the world turning to digital ecosystems solely to bypass US tariffs, sanctions and financial control? And if America were suddenly led by a benevolent isolationist — a modern-day Thomas Jefferson who championed “peace, commerce, and honest friendship with all nations” — would the world abandon blockchain and return to traditional finance?
The answer to both is no.
Banks and financial inclusion
Blockchain and crypto were not born out of today’s geopolitics — they were forged in the ashes of the 2008 global financial crisis. It was then that a pseudonymous figure, Satoshi Nakamoto, proposed a radical alternative: a monetary system that didn’t rely on central banks, governments or financial institutions at all.
While post-financial crisis banking has become more stable — thanks to tighter regulatory capital and liquidity requirements as well as risk frameworks — banks remain limited in who they can serve. One persistent gap is the unbanked and underserved population.
Today, approximately 1.4 billion adults globally remain unbanked, with a significant majority residing in developing economies. In Indonesia, about 51 per cent of adults and in the Philippines, 49 per cent respectively, lack access to formal financial services. Across the wider Southeast Asian region, this number is higher at 60 per cent of the population, according to a World Economic Forum report published in February 2022.
There are systemic reasons for this: conservative credit policies, burdensome onboarding requirements, high service fees, and in many rural areas, simple lack of access to physical bank branches.
However, thanks to the innovation of low-cost smartphones, mobile ownership today far exceeds bank account penetration. When it comes to the need for financing, a growing number of underserved users are turning to blockchain-based DeFi platforms — apps that can be easily downloaded on smartphones — allowing users to store, lend, borrow, send and receive value without ever stepping into a bank.
A trifurcated environment?
“It’s not just about the traditional banking industry co-existing with a digital world built on blockchain and smart technology,” says Rehan Ahmed, CEO of Marketnode, a digital markets infrastructure operator. He adds, “Within this digital ecosystem itself, there are centralised blockchain platforms that operate as licensed and regulated entities and the unregulated and decentralised ones, where ownership is distributed. In essence, we are seeing the global financial marketplace divided into three major ecosystems.”
Rehan’s reference is on point. A trifurcated global banking and financial marketplace is emerging, which simply put can be described as follows:
– TradFi — Today’s banking system, with banks and financial institutions governed by a central bank and regulatory bodies.
– CenFi — Regulated centralised blockchain systems where governments can issue their own digital coin (or CBDCs) and trade with peer governments.
– DeFi — Decentralised blockchains, peer-to-peer ecosystems running independently of nation states or intermediaries that are not regulated.
In short, we are witnessing the birth of a fragmented financial architecture without common standards, shared global oversight or alignment in policies and practices. And in a world already divided politically and economically, this disintegration raises real risks — including the kind that have historically preceded major global conflicts.
“While Mr Trump’s tariffs and sanctions may not be the root cause of this financial fragmentation, they have certainly accelerated it,” notes Professor Emir HRNJIC, the Academic Director National University of Singapore Business School. “The trust-based order that once upheld the dollar as the unifying currency of global trade is beginning to fray,” he adds.
What we are witnessing is not an outright rejection of the dollar, but the quiet erosion of its monopoly — driven by geopolitics, technology, and the pragmatic desire of nations to chart their own course in a more uncertain world.
Asia charting its own path
While America wrestles with its own identity, Asia is quietly charting its own path. As the world’s fastest-growing region, countries across Asia must continue to promote growth, facilitate the cross-border flow of trade and capital, and shield themselves from the ripple effects of sanctions, tariffs, and geopolitical conflicts.
It’s no surprise then that — from China to India, Japan to Thailand, and reaching as far as the Middle East and South Africa — governments and financial institutions are laying the groundwork for a new era of growth. This foundation is anchored in regional connectivity, digital infrastructure, and blockchain-enabled ecosystems.
This isn’t a rebellion. It’s an evolution — toward a more mature, consensus-driven financial and political order, where dialogue, diplomacy, and cross-border trade can truly thrive.
As the tectonic plates of global influence shift, the next chapter of financial leadership may not be written in Washington, Brussels or Moscow — but in Jakarta, Mumbai, Singapore, and Shenzhen.
Sam Ahmed is a senior banker living in Singapore who previously held leadership roles at DBS, Citi, Bank of America Merrill Lynch, and Lehman Brothers.