China Challenges Dollar Dominance as U.S. Currency Slips Further
The U.S. dollar is under increasing pressure, and its global dominance is facing one of the most coordinated challenges in recent memory.
With the DXY index recently dipping to 96, economic volatility and a shifting geopolitical landscape have begun to chip away at the greenback’s appeal—an erosion accelerated by Donald Trump’s revived tariff policies, which have unnerved global markets.
Now, China is publicly pushing for a new direction in global finance—one that moves away from dependence on any single national currency. Pan Gongsheng, governor of the People’s Bank of China, recently proposed a multipolar currency system that would allow sovereign currencies to coexist, compete, and reduce the risks tied to dollar reliance.
While Pan made it clear that China doesn’t seek to replace the dollar with the yuan, he did emphasize the need to diversify and rebalance the global monetary order. His call aligns with broader moves by Beijing, which has been quietly shifting its reserves: the yuan’s share remains modest, but the country has reduced its U.S. Treasury holdings significantly while doubling down on gold—now comprising nearly 7% of its foreign reserves.
China’s vision, according to Pan, isn’t about replacing one hegemon with another—it’s about diffusing risk and reinforcing global financial stability by encouraging more currencies to take part in international trade.
Meanwhile, analysts warn the dollar’s trajectory may continue downward, with forecasts pointing to a possible 10% decline over the next year. As trust in the dollar weakens, the international conversation is turning toward alternatives—and China is making sure its voice leads that shift.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
