The United States is the world’s second-largest exporter of goods and the largest exporter of services. Yet its most valuable and least visible export is one most people overlook: the U.S. dollar itself.
By early 2025, about $1.05 trillion in U.S. banknotes were circulating abroad, nearly half of all U.S. physical currency in existence, according to Federal Reserve data cited by market analyst Stock Market News.
America’s ability to “export” its currency depends on global trust in the dollar as the world’s reserve currency. For decades, that confidence was unquestioned.
Foreign demand for dollars surged after the U.S. abandoned the gold standard in the 1970s, rising from just $5.4 billion in overseas circulation to more than $1 trillion today. Much of that growth came in the wake of crises.
During the global financial meltdown of 2008, investors and central banks clamored for dollar liquidity, and the Covid pandemic sparked another rush as households, businesses, and governments hoarded cash as a form of insurance.
Since 2022, however, that demand has leveled off. Part of the change stems from higher U.S. interest rates, which have made non-yielding cash less attractive than Treasurys or other assets.
The extraordinary liquidity hoarding of the pandemic has also ebbed as economies reopened and financial systems stabilized.
At the same time, governments from Beijing to Brasília have grown more vocal in their desire to reduce dependence on the dollar, both to insulate themselves from U.S. sanctions and to assert greater monetary independence.
De-dollarization is accelerating
The dollar remains the backbone of global finance, but efforts to chip away at its dominance are no longer theoretical. JPMorgan noted in July that the greenback’s share of central bank reserves had reached a two-decade low, while foreign ownership of U.S. Treasurys has been slipping for 15 years.
The bank also highlighted commodity markets as the most visible front in this shift, with a growing portion of global energy trade now priced in currencies other than the dollar.
Others see trade policy playing a role. In April, Deutsche Bank strategist George Saravelos pointed to President Trump’s tariff announcements as a trigger for a “massive rotation out of U.S. assets,” arguing that investors were reassessing the structural appeal of the dollar.
While much of that capital has since flowed back, aided by record-high stock values and the prospect of trade deals, the broader concern remains.
Perhaps the most damaging consequence of de-dollarization would be the loss of America’s ability to finance deficits by issuing its own currency — a shift that could make life significantly harder for ordinary Americans.
“Printed pieces of paper”: the peak of American exceptionalism
While President Trump has often accused China of “cheating” the United States on trade, the reality is more complicated.
In exchange for a steady flow of cheap Chinese goods, the U.S. has been sending back what former Treasury Secretary Larry Summers once described as nothing more than “printed pieces of paper.”
“You think that’s a good deal or a bad deal for us? I think it’s a good deal,” Summers quipped, underscoring the advantage the U.S. derives from issuing the world’s reserve currency.
Beijing has been working to chip away at that privilege. Since 2017, China’s reliance on the dollar has steadily declined as it pushes for broader adoption of the yuan in trade and finance.
“China appears to be accelerating its de-dollarization efforts, though progress remains uneven,” said Dan Wang, director at Eurasia Group, pointing to Beijing’s initiatives to expand yuan-based trade settlement and yuan-denominated financing.
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