De-dollarisation efforts falter as US dollar's share in global trade reaches record high

The worldwide effort to reduce the dollar's dominance has taken a setback, with the dollar's participation in global payments reaching a new high.

An international movement led by China and Russia against the dollar's global dominance has suffered a blow, with the greenback’s percentage of global payments reaching a new high.

Data from the Society for Worldwide Interbank Financial Telecommunication, generally known as SWIFT, showed that in July, a record 46 percent of foreign exchange payments via the messaging system used the US dollar, as per Bloomberg.

The increase in dollar-based SWIFT payments calls into question the drive to abolish the dollar's hegemony over global payments and financial transfers.

SWIFT was founded in 1973 to provide a neutral forum for banks to discuss financial transfers, transactions, and exchanges. The service connects over 11,000 financial institutions from over 200 countries and territories.

Following Moscow's invasion of Ukraine, countries such as China, Russia, and India have been involved in the anti-dollar campaign, particularly after many Russian banks were booted off of SWIFT as part of Western sanctions.

Furthermore, the euro, pound, yen, and yuan were also popular currencies in July. Chinese currency also set records, with more than 3 percent of SWIFT communications referring to the yuan. Bloomberg stated that it was barely 0.03 percent around 13 years ago.

Specifically, the three countries have performed energy exchanges in the yuan, rupee, and ruble during the last year in an effort to minimize their dependency on the US dollar. Meanwhile, the BRICS countries are considering developing a unified currency to compete with the dollar.

However, some market experts have slammed the so-called dedollarisation plans, with one calling the planned BRICS currency proposal "embarrassing."

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