Asif Mahmood

For over a decade, it’s been clear: China is preparing to challenge the supremacy of the US dollar. The question now is — has that moment arrived? Is the age of the petrodollar finally slipping into history? Are we entering a new era of the petroyuan and local currencies?

A paper currency, no matter how powerful, is just that — paper. Like a paper flower, it has no fragrance of its own. Its strength lies not in its substance but in borrowed perception. The day that illusion crumbles, the entire palace of prestige built on the dollar will come crashing down.

Let’s be blunt: the dollar’s dominance is not organic — it’s manufactured. It doesn’t rule the world because of its inherent value, but because of the global narrative crafted around it. Once that narrative starts to wobble, the empire too will begin to shake.

Here’s how absurd the system is: a country manufactures a product, another country buys it. The transaction has nothing to do with the United States. The goods don’t even enter the American market — yet the deal is done in dollars. America gets credit without lifting a finger.

Countries like Pakistan, and almost every nation on Earth, are forced to park billions of dollars in their national reserves just to stay relevant in the global financial system. That artificial demand props up the dollar’s credibility.

Now imagine a world where nations are no longer dependent on the dollar for trade. Instead, they start using their own currencies. What would the global financial landscape look like?

If countries start trading without the dollar, they won’t need to stockpile it in their treasuries either. What happens when nations begin shifting their reserves to gold or other currencies? Where will that leave the dollar?

Of course, challenging the dollar is no easy task. Behind it stands the brute force of the United States — militarily and financially. The fall of the dollar would shake the entire system. We’ve seen what happens to countries that dared to defy it. Saddam Hussein’s real “crime” wasn’t WMDs — it was his attempt to sell oil in currencies other than the dollar.

Only a country like China, with the muscle to absorb the consequences of such defiance, could take on the dollar — and that’s exactly what it’s doing, quietly but steadily.

In 2009, China began its experiment with the yuan. The first phase started with ten ASEAN nations. Today, the yuan has gained serious ground.

Decades ago, the dollar made up 71% of global foreign reserves. Today, it’s down to 58%, and falling. Because the world is now thinking beyond the dollar.

Take China and Russia — over 90% of their trade is now in local currencies. Around three dozen countries are now trading with China directly in yuan, bypassing the dollar altogether.

China and Russia have even developed an alternative to the SWIFT payment system — and it’s not just bilateral anymore. Over 100 countries and 1,500 financial institutions are already onboard.

And that’s not all. BRICS is actively discussing the launch of a new currency to rival the dollar. The US understands the threat and has been warning BRICS members behind the scenes. But this isn’t a small club anymore — BRICS represents 36% of global GDP.

China, meanwhile, is ditching the dollar even in its own reserves. Instead, it’s hoarding gold. And the pace is aggressive — just last year, China bought 300 tons of it. Its gold reserves now exceed 2,300 tons. China’s reserve strategy is shifting from “how many dollars do we have” to “how much gold and how many yuan do we control.”

China is also the biggest buyer of Saudi oil. For years, it paid in dollars. Not anymore. That trade is now increasingly done in yuan — and the trend is growing. As this shift deepens, the reliance on the dollar will shrink even further.

Whether the dollar’s empire collapses or not — time will tell. But one thing is certain: serious cracks have appeared in its once unshakable foundation. The fall of this paper king may no longer be a question of “if,” but “when.”