Dollar: How the Dollar Reached Its Current Level and Is It Even Possible to Replace It?

This is the authors' abstract. We don't add key points for this paper.

Recent geopolitical tensions and Western financial sanctions have accelerated attempts by non-Western nations toward dedollarization and the development of alternative payment rails. However, despite concerted political efforts to expandbilateral trade in local currencies (such as the Ruble, Yuan, and Rupee), the U.S. dollar maintains its overwhelming globaldominance—accounting for roughly 57% of official foreign exchange reserves and remaining on one side of nearly 90%of global foreign exchange transactions. While BRICS-led initiatives have achieved marginal success in localized tradecorridors, they face insurmountable structural barriers that prevent them from fully displacing the dollar. Namely, theseinclude a lack of deep capital markets, capital account controls (especially in China), and the absence of a unifiedmonetary authority.