Dollarization: How much is the ability to replace the US dollar?
The ability to replace the US dollar (USD) in international trade and finance is a complex issue, involving many economic, political, and social factors. Although some countries, especially in the BRICS group (Brazil, Russia, India, China, and South Africa), are actively promoting dollarization, the complete replacement of the USD is still very limited.
Currently, the USD accounts for about 60% of total global foreign exchange reserves and approximately 88% of total daily currency transactions. This indicates that the US dollar still plays a dominant role in international trade and the global economic situation. Despite efforts from countries like China and Russia to reduce dependence on the USD, many experts predict that this process will take time and is not easy to implement due to the stability and popularity of the dollar over more than a century.
Additionally, some analysts argue that dollarization is merely a short-term trend and is not truly capable of overturning the dominance of the USD. In the near future, developing a sufficiently strong alternative currency to compete with the USD is still viewed as a significant challenge, as it requires consensus and coordination among many countries to enhance trust and acceptance.