The U.S. dollar’s global dominance is unlikely to disappear overnight, but it may weaken gradually as structural shifts build across trade, geopolitics, and financial technology. That is the central message from Cedric Chehab, global head of country risk at Fitch Solutions, who argued in a CNBC interview that the dollar is facing a slow erosion rather than a paradigm shift.
Chehab identified three major forces behind that trend: China’s expanding economic influence, the push by multiple countries to diversify away from the U.S.-led financial system, and the growing relevance of central bank digital currencies (CBDCs) and cryptocurrencies. Taken together, these factors suggest that while the dollar remains dominant today, the long-term trajectory may be toward a more fragmented monetary landscape.
China’s Expanding Role in Trade and Finance
According to Chehab, the first major pressure point comes from China’s rise. He noted that China is now the largest trading partner for many economies, and that as its economic strength continues to grow, it will naturally gain more influence in global financial institutions and in international trade.
This matters because reserve currency dominance is not only about financial markets or central bank holdings. It is also closely tied to trade relationships, payment settlement preferences, and the geopolitical influence of large economies. If a greater share of cross-border trade becomes linked to China’s economic orbit, that could eventually support more transactions being settled outside the traditional dollar framework.
Chehab’s view does not imply that the Chinese yuan is about to replace the dollar in the near term. Rather, his point is that China’s growing economic weight can incrementally reshape how countries think about trade invoicing, reserves, and institutional alignment. Over time, these shifts can reduce the degree to which the dollar is treated as the default global medium.
BRICS, ASEAN, and the Broader Diversification Trend
The second factor highlighted by Chehab is the desire among many economies to diversify their exposure to the U.S.-centered financial system. He pointed to Russia as a clear example, saying that the country has tried to delink itself from the U.S.-led financial sector, with Western sanctions accelerating that process.
He also referenced efforts by the BRICS bloc and ASEAN countries to reduce reliance on the dollar. BRICS includes Brazil, Russia, India, China, and South Africa. Reports have indicated that the group has explored new forms of currency arrangements aimed at lowering dependence on the U.S. dollar. ASEAN, which includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, has also been associated with discussions around regional financial autonomy and greater use of local currencies.
These developments do not necessarily point to a single coordinated alternative replacing the dollar. Instead, they suggest a broader pattern: countries increasingly want optionality. For some, that means increasing bilateral trade settlement in local currencies. For others, it means creating payment rails or institutional frameworks that are less exposed to U.S. sanctions risk or dollar liquidity constraints.
In that sense, de-dollarization is not a one-step event but a gradual diversification process. The significance lies less in any immediate displacement of the dollar and more in the cumulative effect of many countries seeking to avoid overdependence on one financial system.
Crypto and CBDCs as Emerging Competitive Forces
The third factor in Chehab’s analysis may be the most notable for digital asset markets. He said that cryptocurrencies and CBDCs are often discussed less in this context, yet they could still have meaningful consequences for the role of traditional currencies, including the dollar.
His warning was straightforward: if global usage of general-purpose currencies declines in some areas because digital alternatives become more attractive or more practical, that could affect the dollar’s standing as well. This does not mean crypto or CBDCs will directly replace the dollar on a one-for-one basis. But it does mean that the future monetary system may become more technologically diverse, with new rails for value transfer competing with legacy currency usage.
For crypto markets, this framing is important. It places digital assets within a larger macroeconomic narrative rather than treating them purely as speculative instruments. Even where cryptocurrencies are not adopted as primary payment tools, their existence can influence policy, accelerate innovation, and push governments and central banks to rethink the architecture of money and settlement.
CBDCs, meanwhile, introduce another layer of competition. If central banks issue digital versions of sovereign currencies that streamline domestic and cross-border payments, the existing hierarchy of currency usage could change over time. The impact on the dollar would depend on adoption, interoperability, and geopolitical trust, but Chehab’s point is that the competitive environment around money itself is broadening.
Slow Erosion, Not Sudden Collapse
A key part of Chehab’s assessment is his emphasis on pace. He explicitly rejected the idea of an abrupt transformation, arguing instead that any reduction in the dollar’s status would likely unfold slowly. That distinction matters because the dollar still benefits from deep capital markets, broad international acceptance, institutional credibility, and entrenched use across trade and finance.
Still, gradual erosion can be significant. Monetary dominance is not only lost through crisis; it can also be diluted through long-term shifts in trade patterns, technological innovation, and geopolitical strategy. In that sense, the risk to the dollar is less about a dramatic tipping point and more about persistent, incremental change.
Chehab’s comments reflect a growing debate in global markets about whether the international monetary system is becoming more multipolar. If China gains more financial influence, if BRICS and regional blocs continue to pursue de-dollarization strategies, and if crypto and CBDCs expand the ways value moves across borders, then the dollar’s share of global activity could face increasing pressure over time.
For investors, policymakers, and crypto participants, the takeaway is not that the dollar era is ending tomorrow. Rather, it is that the forces shaping the next phase of the global financial order are already visible. And among those forces, digital assets now sit alongside geopolitics and trade realignment as part of the conversation.