With gold and silver prices surging and the DXY sliding, talk of the dollar’s decline is back, with headlines claiming the greenback has lost its edge and some warning that a full-blown collapse could be near.
Sure, confidence in the dollar has been slowly eroding — but it’s far too soon to say the global currency system is about to flip.
Indeed, the dollar’s muted response during market panics suggests it’s no longer the classic safe haven it once was — unlike the Swiss franc — yet the world can’t just walk away from it overnight, since a huge portion of international trade and financial settlements still depends on the greenback.
Even with efforts by countries like Russia and China to shift trade to their own currencies, according to the Bank for International Settlements’ 2025 survey, global daily forex trading reached $9.6 trillion, with the dollar accounting for nearly 90% of all transactions.
Fed data from last year, on the other hand, shows that roughly 58% of official global foreign exchange reserves are held in dollars, and with most stablecoins also pegged to the greenback, it’s clear the U.S. dollar remains at the center of the global financial system — meaning, barring a major shock, it isn’t going anywhere anytime soon.
But what about China’s push to make the yuan a reserve currency?
Recently, Xi Jinping highlighted the need for a “strong currency” that could be widely used in international trade, investment, and forex markets, and eventually gain reserve currency status, but for that to happen, China would need to make the yuan fully convertible and lift capital controls — something Beijing is highly unlikely to do anytime soon.
So, is the dollar really safe?
In theory, there are plenty of risks, particularly regarding the country’s financial health: according to the Congressional Budget Office, the U.S. ran a $1.8 trillion budget deficit in 2025, and looking ahead, the situation could worsen further with the passage of the so-called “Big Beautiful Bill,” which is expected to add several trillion more to U.S. debt.
As a result, investor confidence in the dollar — both institutional and retail — is likely to keep declining, and U.S. government debt may require a higher risk premium.
The good news is that equities can actually thrive in this environment, since they’re often seen as a hedge against currency debasement, which helps explain why the S&P 500 keeps climbing despite broader uncertainty.
For companies considering IPOs, this market momentum could be a real opportunity, and it’ll be interesting to see whether names like Discord or Strava decide to go public this year.