In a development that has set off alarms in economic and geopolitical circles, 11 countries—all part of the Commonwealth of Independent States (CIS)—have announced plans to formally reduce or eliminate the U.S. dollar from their international transactions starting in 2025. These nations include Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan, and, most surprisingly, Ukraine.
Though often on opposing sides of the geopolitical spectrum—Russia and Ukraine being the most glaring example—the decision by this bloc to move away from the dollar signals a collective effort to redefine sovereignty in the global financial system and challenge decades of U.S. monetary dominance.
The Dollar’s Waning Influence
Since the Bretton Woods Conference in 1944, the U.S. dollar has sat atop the global financial hierarchy. It is the most traded currency, the most used for reserves, and the default medium for international trade. Around 80% of global transactions are still conducted in dollars. However, cracks are beginning to show. As JP Morgan’s global research chair Joyce Chang noted, while the dollar may remain dominant for some time, its hold is weakening.
Several factors contribute to this shift: political discontent with U.S. foreign policy, growing multipolarity, economic sanctions, and the rise of digital alternatives like central bank digital currencies (CBDCs) and blockchain-based payment networks.
Why These Countries, Why Now?
The choice to de-dollarize is both strategic and symbolic. For these countries, continuing to operate within a dollar-dominated system means exposure to U.S. sanctions, restricted financial autonomy, and vulnerability to American economic cycles. Russia, which has faced sustained sanctions since 2014, began reducing its dollar exposure years ago. Others are now following suit, emboldened by technological tools and changing geopolitical currents.
What’s notable is the degree of alignment on this issue across countries with varied relationships to Washington and even between historical adversaries like Ukraine and Russia. In this case, realpolitik and economic pragmatism are outweighing diplomatic hostility.
The Mechanics of De-Dollarization
This won’t be an overnight shift. The transition will be gradual, with financial institutions recalibrating their systems to accommodate local currencies or alternative units of trade. Bilateral agreements will likely pave the way—Russia and China, for instance, already settle a significant portion of their trade in yuan and rubles.
The CIS countries will increasingly rely on digital transaction platforms, local currencies, and regional clearinghouses that bypass the U.S. financial system. While this does not completely eradicate the use of the dollar domestically or internationally, it does dilute its supremacy.
What Does This Mean for the United States?
The implications are nuanced but significant. The U.S. derives enormous benefits from the dollar’s global status—lower borrowing costs, the ability to run persistent trade deficits, and unparalleled economic leverage through sanctions and monetary policy. De-dollarization, even in small doses, chips away at that foundation.
If global demand for dollars falls, interest rates in the U.S. could rise, and the country’s ability to influence global economics through financial mechanisms will diminish. As noted in a Foreign Affairs article, overreliance on the dollar as a weapon—via tariffs and sanctions—may ironically be speeding up its decline.
However, experts caution against overstating the immediate threat. Economist Gary Hufbauer estimates a potential 5% drop in foreign central bank dollar holdings—not exactly a collapse. Christopher Breen of the Centre for Economics and Business Research argues that no viable alternative to the dollar exists yet, and a multipolar currency system is more likely than a singular successor.
Why It Matters: Beyond the Headlines
This move by the CIS countries is a bellwether. It reflects a broader trend of countries reasserting monetary sovereignty and reevaluating their place in a global financial system long dominated by Washington. It also speaks to the shifting balance of power—from unipolarity to multipolarity—not just politically, but economically.
For now, the dollar still rules. But the foundations of its reign are eroding. And when 11 nations choose to opt out, even partially, it signals that the era of unquestioned dollar hegemony may be nearing its end.
