by Muhammad Asif NOOR
The international monetary system is undergoing a slow but significant reconfiguration. For decades, the U.S. dollar has stood unchallenged as the dominant medium of exchange and reserve currency. It has been the backbone of global trade, financial flows, and commodity pricing, giving Washington unparalleled leverage over the global economy. Yet, recent developments from geopolitical tensions to technological disruptions are accelerating a gradual shift toward a more pluralistic “currency order,” one in which multiple local and regional currencies play a bigger role in cross-border settlements. At the 2025 China International Fair for Trade in Services (CIFTIS), this trend was placed under the spotlight, highlighting practical examples of local currency usage in international trade. Far from being a theoretical aspiration, the new currency order is already taking shape through bilateral arrangements, regional agreements, and technological pilots that allow businesses to hedge risk, reduce transaction costs, and insulate themselves from the volatility of global geopolitics.
The catalysts for this transformation lie in the volatile macroeconomic environment of 2025. The Trump administration’s renewed protectionism has reintroduced tariffs at historic highs, forcing emerging markets to reduce reliance on the dollar. The U.S. dollar accounts for nearly 60% of global foreign exchange reserves and is involved in almost 90% of global forex trades. Its dominance has rested on deep financial markets, trust in U.S. institutions, and network effects that reinforce its centrality. Yet, this supremacy comes at a cost for others. First, dollar dependence exposes countries to exchange-rate volatility whenever U.S. monetary policy shifts. The Federal Reserve’s interest rate hikes ripple across emerging economies, constraining credit availability and fueling debt stress. Second, Washington’s ability to weaponize the dollar system through sanctions—whether targeting Iran, Russia, or others—has encouraged states to diversify settlement options to protect themselves from potential exclusion. Finally, in an increasingly multipolar world, it is becoming politically untenable for rising powers to rely so heavily on a single currency controlled by one country. These structural concerns explain why so many governments, banks, and businesses are experimenting with alternatives.
U.S. tariffs, hovering at historic highs under the Trump administration’s renewed protectionism, have compelled emerging markets to seek alternatives to dollar dependency, which still commands 60 percent of global payments per SWIFT data through August 2025. China’s renminbi (RMB) has been a prime beneficiary, with its share in global payments climbing to 4.69 percent in March 2025, overtaking the yen and reflecting a tripling in trade finance usage since 2020. Domestically, RMB settlements in China’s goods trade hit 30 percent by mid-2025, bolstering corporate hedging against fluctuations. CIFTIS 2025 amplified these narratives, showcasing how RMB internationalization via the Cross-Border Interbank Payment System (CIPS), which processed $24 trillion in 2024 and added major South African and UAE banks in early 2025 fosters balanced trade ties. This momentum aligns with broader forecasts: the IMF projects that non-dollar foreign exchange settlements could exceed 20 percent by year-end, up from 2 percent in 2010.
The examples highlighted at CIFTIS underscore the depth of this transition. In Latin America, the Industrial and Commercial Bank of China pioneered the first fully deliverable forward RMB–Brazilian real transaction, allowing firms to hedge currency risk directly. In Southeast Asia, ASEAN’s Local Currency Settlement Framework now covers more than 20 percent of intra-regional trade, integrated with instant payment systems. In Africa, the African Export-Import Bank has facilitated local currency trade, aligning with BRICS+ platforms for blockchain-enabled settlements. Even in small but strategically placed Brunei, Bank of China’s dual RMB–Brunei dollar financing supported Muara Port’s modernization, handling 80 percent of peak transactions.
Technology is accelerating these shifts. The multi-CBDC project mBridge—linking China, Thailand, the UAE, Hong Kong, and Saudi Arabia—has already piloted real-value settlements at a fraction of current costs. Tencent’s integration into the system showed how fast and secure diverse-currency clearing can become. While the Bank for International Settlements withdrew over sanction-evasion concerns, mBridge continues under the leadership of participating central banks, interoperable with China’s CIPS and increasingly attractive to Belt and Road partners. Meanwhile, Washington has chosen retreat: President Trump’s executive order banning retail CBDC development in March signaled a lack of U.S. appetite for competing in this space.
Of course, challenges remain. Yet the broader direction is unmistakable. The world of 2025 is no longer willing to accept dollar dominance as natural or inevitable. The examples showcased at CIFTIS, from Brunei’s ports to Brazil’s hedging tools, from ASEAN’s QR payments to BRICS Pay’s blockchain ledger—point toward a future where trade is conducted on more equitable terms. It is a vision of a financial system that reflects the multipolar character of global politics and the technological dynamism of our age.
The new currency order represents more than a technical adjustment; it is a rebalancing of power. It is about giving nations choices, allowing them to chart financial strategies aligned with their own interests. For many, it is also about dignity, the ability to trade, invest, and grow without being hostage to another state’s political whims. By leading this charge, China has not only advanced its own currency but offered a model of cooperative financial sovereignty.
If the 20th century was defined by a single hegemonic currency, the 21st will be remembered as the age of pluralism. The dollar will remain important, but it will no longer be alone. The rise of the other currencies the strengthening of regional currencies, and the spread of digital settlement systems mark the contours of a world where financial flows mirror the diversity of global trade. This is the dawn of a new currency order—cautious, incremental, but unmistakably underway.
