The global retreat from U.S. dollar dominance is no longer theoretical—it’s in motion, accelerated by trade wars, central bank politicization, and a shifting economic order increasingly open to cryptocurrency.

Overview

Strategic incoherence at home enables both market participants and geopolitical rivals to undermine dollar primacy—often by turning to crypto, digital currencies, or regional settlement systems. By failing to harmonize crypto, monetary, and capital market regulation, the U.S. leaves itself vulnerable to capital flight, jurisdictional bypassing, and a loss of leadership in global fintech governance. This amplifies the potential for of a multipolar future, where regulatory coherence and digital asset policy play as large a role as trade or military posture in global influence.

Last year, at OODAcon 2024, OODA CEO Matt Devost shared during his keynote presentation both his early evangelism and adoption of bitcoin, cryptocurrency, and OODA LLC’s “bets” over the last 5 to 8 years in the crypto marketplace.

For OODA Loop, Bob and Matt’s early OODA LLC evangelism translated over the last four years into an editorial survey of crypto and digital currency initiatives from around the globe – all of which were officially sanctioned to enhance national competitive advantage (in the event crypto overtakes the US dollar as the global reserve currency). 

Our thesis has always been that the cumulative global adoption rate of state-sanctioned crypto and digital currency legalization and regulation will propel this innovative system for value exchange as a global currency standard.

This baseline “Global Crypto and Digital Currency” research effort also left us open to recognizing geo-political “de-dollarization initiatives” as an extension of the potential disintermediation of the global financial and monetary systems by cryptocurrencies and blockchain.

This Analysis is a Cautionary Tale

We should also note here that this post is designed as an objective update on the acceleration of cryptocurrency relative to the broader de-dollarization patterns we are seeing in the system, and is not an endorsement of any particular emerging currency system or the scale and speed of the disruption. If anything, in the last two years, our general evangelism on behalf of the potential of cryptocurrency and blockchain has always been very seriously tempered by concern for the ongoing impact of “Regulatory Arbitrage” in the U.S. System (as expressed in the OODA Almanac 2025 – Whiplash). Arguably, regulatory arbitrage:

• Contributes to internal incoherence that weakens U.S. market leadership.
• Fuels strategic exit from dollar-centric systems.
• Undermines Dollar-Based Trust at the Institutional Layer; and
• Is a hidden Accelerator of De-dollarization

We also added cautionary balance to any optimism about cryptocurrency in a recent post: vulnerabilities in crypto’s ecosystem — security, trust, illicit finance, privacy — pose serious challenges to its scaling as a secure global monetary substitute. It suggests a more fragile, risk-laden transition to a multipolar or crypto-integrated financial future than a smooth or inevitable displacement of dollar hegemony. See:

The U.S. Market-Driven Crypto Policy Pivot Aside: Global Security, Trust, Illicit Activity, and Privacy Challenges Persist – Despite evolving crypto policies and regulatory shifts, significant security, trust, and privacy challenges in cryptocurrency and blockchain remain persistent, threatening financial stability and public trust.

What is the Disintermediation of the Global Financial System?

Disintermediation, in the context of the potential disruption of the global financial system and U.S. dollar dominance, refers to the removal or bypassing of traditional financial intermediaries, such as central banks, correspondent banks, or the SWIFT network, in cross-border transactions and monetary systems.

In this scenario, disintermediation would mean that nations, corporations, and individuals increasingly use alternative mechanisms—like cryptocurrency networks, central bank digital currencies (CBDCs), or bilateral trade in local currencies—to settle transactions without routing through the U.S. dollar or U.S.-controlled infrastructure. This reduces both the dollar’s centrality and Washington’s geopolitical leverage in the global economy.

What is the OODA Loop Working Definition of “De-dollarization?

De-dollarization is the strategic process by which countries, institutions, and markets reduce their reliance on the U.S. dollar for international trade, financial reserves, debt issuance, and payment systems—in favor of alternative currencies, digital assets, or regional financial architectures—as a means to enhance economic sovereignty, mitigate geopolitical risk, and counterbalance U.S. financial dominance.

This definition captures several key insights from recent OODA Loop research efforts:

• It is seen not only as monetary diversification but as a reconfiguration of global power.
• It is intentional and geopolitical, not merely economic.
• It includes alternatives such as Bitcoin, renminbi (RMB), the euro, and non-SWIFT blockchain-based systems.
• It reflects push factors (e.g., U.S. sanctions, trade wars, inflation risk) and pull factors (e.g., rise of BRICS, crypto adoption, CBDCs).

Why This Matters

This tracking, framing, and analysis has now positioned OODA Loop with a unique prism on the unintended consequences of the ongoing tariff policies and the current “Trade Wars” induced by the current American presidential administration, which:

• have impacted the overall strength of the dollar; and
• Is the first time in the early stages of a financial crisis in the last 80 years that the global financial markets did not move towards the dollar and American financial assets as a “safe harbor”.

For decades, the U.S. dollar has been the world’s dominant reserve currency—what economist Kenneth Rogoff characterizes as an “exorbitant privilege” that has lowered borrowing costs and given Washington unrivaled geopolitical leverage.

But a convergence of forces—Trump-era trade policy, foreign sanctions backlash, and loss of trust in U.S. institutions—is fracturing the foundations of that dominance. As the dollar weakens and confidence erodes, sovereign alternatives and decentralized currencies are gaining ground. The implications are profound: from market volatility to strategic realignments in global finance, and even the reshaping of cybersecurity and illicit finance enforcement.

Key Points

• Weaponized Dollar Weakens Trust: Trump-era policies, including tariffs and sanctions, have turned the dollar from a neutral store of value into a geopolitical tool, prompting countries like China and Russia to seek alternatives.
• Trade War Accelerants: The return of high, unpredictable tariffs, particularly under Trump’s second term, has driven foreign investors to reduce their exposure to U.S. assets, compounding dollar weakness.
• Breakdown of Safe-Haven Dynamics: Once a counter-cyclical safe haven, the dollar is now falling alongside U.S. equities—a sign that its defensive role in global portfolios is collapsing.
• Federal Reserve Independence at Risk: Pressure from political actors to lower rates or exert control over monetary policy threatens the credibility of the Fed, a key underpinning of dollar strength.
• Emergence of Crypto Alternatives: From BRICS Bitcoin experiments to U.S. government crypto reserves, the shift toward cryptocurrency is intensifying as states and markets seek digital stores of value outside of U.S. control.
• Multicurrency Future Emerging: While no single alternative to the dollar exists yet, the long-term trend points toward a multipolar currency system with greater roles for the euro, renminbi, and crypto assets.

Summary of Here’s Why a Weaker Dollar Matters (Bloomberg Podcast)

The discussion underscores how politicized monetary policy and protectionist trade strategies risk undermining the U.S.’s most powerful economic instrument: the global trust in the dollar.

In this episode of Bloomberg’s Here’s Why, host Stephen Carroll speaks with Saleh Mohsen, senior Washington correspondent and author of Paper Soldiers: How the Weaponization of the Dollar Changed the World Order, to explore the global ripple effects of a weakening U.S. dollar. Mohsen explains that the dollar’s recent decline is self-inflicted, driven not by external crises but by U.S. policy decisions—particularly the Trump administration’s trade war, tariffs, and political pressure on the Federal Reserve. Traditionally, global uncertainty strengthens the dollar as a haven, but that dynamic is breaking down. Instead, capital is fleeing U.S. assets, leading to a compounding effect: a falling dollar and falling U.S. equities. Key points include:

• Foreign investors and central banks are reevaluating their dollar exposure, which weakens the dollar’s global reserve role.
• A weaker dollar benefits U.S. exporters and foreign tourists, but hurts U.S. consumers abroad and signals instability to global markets.
• Investment managers are pulling back, with some holding record levels of cash amid uncertainty.
• If this trend continues, the dollar’s dominance could shift to a multipolar currency regime, with the renminbi, euro, and even crypto playing larger roles.

Summary of “Trump vs. the Dollar: The Ezra Klein Show with Kenneth Rogoff” (New York Times)

The conversation frames the weakening of the dollar not as a technical or cyclical issue, but as a symptom of deeper political dysfunction, with global repercussions.

In this episode of The Ezra Klein Show, economist and former IMF chief Kenneth Rogoff—author of The Curse of Cash—joins Ezra Klein to discuss the long-term consequences of the Trump administration’s approach to monetary policy, central bank independence, and global financial dominance. Rogoff warns that Donald Trump’s politicization of the Federal Reserve, through public attacks and the threat of firing Jerome Powell, severely weakens the credibility of the U.S. central bank. This, combined with tariff-heavy trade policy and erratic fiscal management, sends a message to the world: the U.S. dollar is no longer a reliably apolitical safe haven. Key insights include:

• The U.S. is actively eroding its “exorbitant privilege”—the dollar’s role as the global reserve currency—through internal instability, not external threats.
• Central bank independence is a cornerstone of market trust, and its perceived compromise has led to capital flight and growing interest in non-dollar alternatives.
• While Rogoff still views full de-dollarization as a long-term process, he argues the Trump era initiated irreversible cracks in the dollar-based system.
• Cryptocurrencies, the euro, and the Chinese renminbi are all gaining traction as partial hedges against dollar volatility.
• The discussion underscores how politicized monetary policy and protectionist trade strategies risk undermining the U.S.’s most powerful economic instrument: the global trust in the dollar.

The discussion underscores how politicized monetary policy and protectionist trade strategies risk undermining the U.S.’s most powerful economic instrument: the global trust in the dollar.

What Next?

• Global Diversification Away from the Dollar: Expect an incremental yet persistent reduction in dollar holdings by sovereigns, wealth funds, and central banks, accelerated by U.S. unpredictability and debt concerns.
• Cryptocurrency as Financial Escape Valve: Crypto adoption by both adversaries and allies may increase, not just as a speculative investment but as a hedge against financial exclusion or dollar-based control.
• Rising Costs for U.S. Debt: As the “exorbitant privilege” erodes, the U.S. may face structurally higher borrowing costs, making fiscal imbalances more politically and economically painful.
• Institutional Reforms or Global Bifurcation: The U.S. can attempt to restore trust through credible reforms, but failure to do so risks entrenching a bifurcated global financial system split along geopolitical lines.

Xi Jinping’s Last Decision: OODA Loop Scenario Planning on the Potential for Extreme PRC–US Economic War

By offering a framework of how China might act under stress, this OODA analysis brings scenario planning rigor to the claim that the world is headed toward a multipolar currency system, with the dollar remaining powerful but no longer singular. This mirrors The Great Dollar Retreat’s expectation of a long-term realignment in financial power.

This recent OODA Loop scenario planning analysis by OODA CTO Bob Gourley – entitled “Xi Jinping’s Last Decision: Scenario Planning on the Potential for Extreme PRC–US Economic War” – provides a critical geopolitical lens that directly supports and deepens the argument made in this post.

Here’s how they intersect:

1. Reinforces the Core Thesis of “Dollar Retreat” Under Strategic Pressure

In this scenario, de-dollarization isn’t passive or incidental—it is deliberate strategic maneuvering from a global power. This Xi Jinping scenario analysis outlines how China is actively preparing for the unraveling of dollar dominance as a contingency of extreme economic conflict with the U.S. This supports the central idea in the Dollar Retreat analysis that trust in U.S. financial infrastructure is eroding—not just from domestic political turmoil, but from external planning by peer competitors like the PRC.

2. Validates the Link Between Trade Wars and Accelerated Currency Realignment

The scenario modeling explores China’s responses to tariffs, financial sanctions, and economic decoupling—precisely the types of Trump-era trade war tactics that The Great Dollar Retreat claims are breaking the dollar’s safe haven dynamics. It affirms that economic warfare, like unpredictable tariff regimes, can catalyze a monetary counteroffensive, particularly from a state like China with global ambitions.

3. Connects De-dollarization with Parallel Crypto and RMB Strategies

These developments feed directly into the Dollar Retreat’s assertion that Cryptocurrency and multicurrency systems are becoming tools of sovereign statecraft—hedges against U.S. financial coercion. Bob notes that China’s central bank is building alternatives, such as the Digital Yuan and non-dollar settlement mechanisms with key trading partners.

4. Supports the Argument that Dollar-Based Systems Are Now Liability-Risked

This scenario reinforces the broader Dollar Retreat narrative that dollar power has become a double-edged sword—effective in the short term but provoking long-term exit strategies. The Xi Jinping scenario highlights how U.S. dominance over the SWIFT network, global payment rails, and sanctions enforcement has triggered a reassessment among other global powers about the risks of being dollar-dependent.

5. Adds Strategic Foresight to the Multipolar Currency Argument

The Xi Jinping economic war scenario doesn’t just support The Great Dollar Retreat—it supplies the strategic backbone for its predictive claims. It shows that de-dollarization is not merely reactive or ideological, but a contingency embedded in great power strategy. It adds depth to the argument that cryptocurrencies—and decentralized alternatives—are gaining traction as monetary escape hatches in an era of weaponized finance.

Further OODA Loop Resources

OODA Loop on De-dollarization

Collectively, these articles portray a world gradually shifting toward a multipolar currency regime, where the dollar’s supremacy is no longer assumed. While the dollar remains dominant, its role is increasingly contested by strategic, technological, and political alternatives.

“OODA Loop on De-dollarization” is a series of strategic OODA Loop analyses exploring the global shift away from U.S. dollar dominance. It highlights the accelerating pace of de-dollarization efforts by geopolitical rivals, major economies, and emerging alliances—particularly the BRICS+ nations—and examines how cryptocurrency is increasingly integrated into these strategies.

Each piece offers insight into how global power dynamics, technological disruption, and financial realignment intersect to challenge the existing fiat-based system.

Key Themes and Insights

• Grounding the “Retreat” in Geostrategic Reality:  The OODA analysis tracks specific, coordinated moves by the BRICS+ bloc, Saudi Arabia, and China to reduce reliance on the U.S. dollar—confirming that dedollarization is not speculative but underway. This reinforces the central argument of the summary: that U.S. financial hegemony is fracturing, not hypothetically, but via deliberate geopolitical engineering.
• Validating the Role of Trade Wars as Catalysts:  OODA’s scenario planning around China and Trump-era tariffs (e.g., Xi Jinping’s Last Decision) shows how aggressive trade policy and sanctions have eroded trust in U.S. institutions and spurred a realignment of currency strategies. This supports the summary’s claim that trade wars, not just monetary policy, are accelerating de-dollarization.
• Embedding Cryptocurrency Within a Strategic Rebalance:  By highlighting the tactical and systemic role of digital assets in financial systems—from Saudi Arabia’s experimentation with alternatives to the petrodollar to BRICS crypto trials—the OODA analysis justifies the summary’s framing of crypto as a viable and increasingly normalized hedge against fiat volatility and U.S. financial overreach.
• Demonstrating the Irreversibility of Eroded Trust:  The idea that the U.S. may have permanently lost part of its “exorbitant privilege” is echoed in both Kenneth Rogoff’s warning and OODA’s geopolitical forecasting. The summary’s forecast that we’re unlikely to “unring the bell” is backed by articles like De-Dollarization: New Fronts in the Global War Being Waged Against the U.S. Dollar, which reveal the durable infrastructure being built to bypass the dollar.
• Contextualizing a Multipolar Financial Future:  OODA’s data-driven prediction that BRICS GDP could surpass G7 levels by 2028 offers macroeconomic support for the summary’s vision of a multipolar currency regime—in which dollar dominance persists, but no longer unchallenged.

The BRICS Plus Summit Pursues Bitcoin-based De-dollarization and Surpasses GDP of G7 Countries: Explores how the BRICS+ bloc is using Bitcoin as a geopolitical tool to challenge U.S. dollar dominance, coinciding with the group’s economic size surpassing the G7.

De-Dollarization: New Fronts in the Global War Being Waged Against the U.S. Dollar: Maps the tactical and strategic moves by adversaries and allies to reduce reliance on the dollar, from commodity pricing to SWIFT alternatives.

2024 Year-end Review: Geopolitical Risk and Technology: Summarizes key geopolitical and technological trends of the year, including the acceleration of de-dollarization movements amid systemic disruptions.

Are Global Stressors and Bank Failures Considered Strategically Net Positive by Some Market Players?: Assesses how some actors may be leveraging systemic financial crises and de-dollarization to reshape global market share and influence.

What Next? The BRICs Global Share of GDP May Overtake the G7 by 2028: Highlights economic trendlines pointing to a shift in global power, with BRICS on track to eclipse G7 economies, which could intensify de-dollarization.

Saudi Arabia and the Future of Money: Investigates Riyadh’s potential pivot away from the petrodollar system, its role in the BRICS alignment, and experiments with blockchain and digital assets.

JP Morgan’s Take on Policy Shifts: Deregulation, Tariffs, Tax Cuts, Crypto, and More: Summarizes JP Morgan’s strategic outlook on a confluence of Trump-era economic shifts—including deregulation, crypto legalization, and the weakening dollar—and their likely impact on market structure.

OODA Loop on the Shifting Political Economy of Cryptocurrency

This curated OODA Loop series chronicles the transformation of cryptocurrency from a fringe technology to a strategic pillar of economic policy, national security, and global market realignment. Together, these insights document how digital assets are being redefined as instruments of statecraft, financial architecture, and competitive positioning—especially amid rising de-dollarization and institutional distrust.

Key Themes and Insights

• From Regulatory Hostility to Strategic Embrace:  A clear narrative arc emerges: the U.S. pivoted from adversarial crypto regulation (e.g., SEC lawsuits) to policy accommodation and infrastructure development, including plans for a national crypto strategic reserve and executive orders outlining federal objectives.
• Europe and BRICS Surge Ahead:  While the U.S. grappled with internal policy confusion, Europe and other global actors surged ahead in creating regulatory clarity, technical frameworks, and settlement alternatives.
• Crypto as a Tool of Statecraft:  OODA identifies a growing politicization of crypto, not just for domestic economies, but as leverage in global negotiations, financial warfare, and efforts to decouple from U.S.-centric infrastructure.
• Institutional and Infrastructure Integration:  Reports show deepening integration between crypto and traditional finance infrastructure, including SWIFT’s exploration of blockchain and the U.S. government’s quiet custodianship of over $13 billion in crypto assets.
• National Security Convergence:  The fusion of cybercrime and crypto enforcement units under DOJ oversight signals a structural evolution in national security strategy, positioning crypto as both a vulnerability and a vector for sovereign control.
• Data-Driven Reframing of Crypto Risk:  A major narrative correction is offered by evidence that crypto fraud comprises less than 1% of global illicit finance, undercutting longstanding arguments that crypto is disproportionately criminal.

The Stifling of the U.S. Crypto Innovation Ecosystem has Begun – While the EU Takes the Lead Globally: Explores how regulatory uncertainty in the U.S. has stalled innovation in the crypto space, while the European Union races ahead with more coherent frameworks, positioning itself as a global leader in digital asset regulation.

A Major U.S. Crypto Policy Overhaul – SEC Drops Lawsuits; Plans for Crypto Strategic Reserve and Summit Announced: Details the U.S. government’s dramatic reversal in crypto policy: regulatory lawsuits are withdrawn, and a national crypto strategic reserve is proposed as part of an institutional pivot toward blockchain-backed assets.

The U.S. Market-Driven Crypto Policy Pivot Aside: Global Security, Trust, Illicit Activity, and Privacy Challenges Persist: While the U.S. softens its stance toward crypto markets, this report cautions that persistent risks, like fraud, money laundering, and surveillance gaps, could complicate both domestic adoption and global interoperability.

New Executive Order Maps out the Future of U.S. Cryptocurrency Policy: Analyzes a landmark executive order that outlines the federal vision for crypto, including national security priorities, international coordination, and the development of digital dollar alternatives.

The Q424 Pivot: The Emergent Political Economy of the U.S. Crypto Marketplace: Captures the inflection point in late 2024 where U.S. political discourse, financial market incentives, and regulatory recalibrations began to align toward a more crypto-integrated economic model.

The Political Acceleration of Crypto: Explores how crypto is no longer just a tech innovation but a political and strategic issue, used by factions within government and industry to shape economic sovereignty and digital governance.

The U.S. Government has $13.3B Worth of Crypto Stashed Away; Transfers $214M to a Coinbase Wallet: Breaks the story of U.S. government crypto holdings—now over $13 billion—and their partial transfer to a Coinbase wallet, suggesting a strategic custodial or market-signaling shift.

The Nerve and Capillary System of the Global Fiat Currency Standard – SWIFT – Explores Blockchain and Crypto: Analyzes how SWIFT, the global payments backbone, is quietly exploring blockchain integration—potentially transforming interbank settlements and further legitimizing crypto’s role in global finance.

Crypto Fraud is Less Than 1% of the Annual $3.2 Trillion in Illegal Activity in the Traditional Fiat Monetary System: Offers a data-driven rebuttal to claims that crypto is disproportionately used for crime, showing that fiat remains the dominant medium for illicit finance.

DoJ Acts on National Cybersecurity Strategy Implementation Plan with Fusion of Cyber-Crypto Crime Units: Details the DOJ’s creation of integrated cyber-crypto task forces, signaling a more holistic national security strategy in the face of digitally mediated financial threats.

JP Morgan’s Take on Policy Shifts: Deregulation, Tariffs, Tax Cuts, Crypto, and More
Summarizes JP Morgan’s strategic outlook on a confluence of Trump-era economic shifts—including deregulation, crypto legalization, and the weakening dollar—and their likely impact on market structure.

The Stifling of the U.S. Crypto Innovation Ecosystem has Begun – While the EU Takes the Lead Globally — OODAloop