The Future of Dollar Hegemony: What Are the Real Variables Among Debt, BRICS, and Stablecoins?

The three variables often cited as threats to dollar hegemony are not pulling in the same direction. BRICS’ de-dollarization is narrower than perceived, and stablecoins actually boost demand for the dollar. What could truly weaken the dollar is the $40 trillion debt the U.S. has accumulated itself.**

Figures confirmed as of September 2026

Articles proclaiming ’the end of the dollar era’ have been recurring for years, yet the dollar remains firmly in place. News about BRICS creating a new payment network, stablecoins replacing banks, and U.S. debt surpassing $40 trillion can all appear in a single week.

Looking at these three headlines side-by-side, I noticed something strange. While all are grouped under the theme of a ‘dollar crisis,’ their actual impact on the dollar points in different directions. I examined each one using the data.

Where Does Dollar Hegemony Stand Now?

It remains overwhelming. According to the IMF Currency Composition of Official Foreign Exchange Reserves (COFER) statistics, the dollar’s share in Q1 2026 was 57.13%, actually up from 56.42% in the previous quarter. The IMF explains this rise primarily as a valuation effect due to the dollar’s strength.

Long-term trends tell a slightly different story. The share, which was in the 70% range in the early 2000s, has drifted down to the high 50s over the past two decades. However, the void wasn’t filled by any single currency like the Euro or the Yuan; instead, it has been split among various currencies like the Australian and Canadian dollars. The lack of a viable alternative to replace the dollar is what currently sustains its hegemony.

Variable 1: BRICS De-dollarization—Actual Scale is Smaller Than the Rhetoric

While BRICS has the will to shake the dollar, it currently lacks the means to replace it.

Following its expansion in 2025, BRICS now consists of 11 full members and 10 partner countries, accounting for approximately 41% of global GDP in purchasing power parity. There is indeed a ‘BRICS Pay’ system that connects member payment networks to bypass dollar-based correspondent banks.

However, looking at Modern Diplomacy’s payment data analysis, de-dollarized transactions are mostly concentrated in bilateral settlements between sanctioned nations like Russia and Iran. Concepts such as a common currency, the full-scale adoption of BRICS Pay, or a ‘Unit’ remain in the pilot, research, or stalled stages.

This is because the interests of member nations diverge. India has no intention of joining a Yuan-centric system, and Saudi Arabia still receives most of its oil payments in dollars. While the slogan of abandoning the dollar is shared, consensus breaks down when deciding what to replace it with.

Variable 2: Do Stablecoins Weaken or Strengthen the Dollar?

Unexpectedly, stablecoins to date have tended to strengthen the dollar.

Almost all circulating stablecoins are dollar-denominated, and issuers hold reserves in U.S. Treasuries.

The GENIUS Act, enacted in 2025, mandates that payment-grade stablecoins be backed 1-to-1 by highly liquid assets—such as cash, demand deposits, short-term Treasuries (T-bills), and reverse repurchase agreements backed by Treasuries—and requires monthly disclosures. The law has effectively created a structure where ‘an increase in stablecoins leads to an increase in demand for U.S. Treasuries.’

The scale is also not negligible.

Standard Chartered estimates that the stablecoin market will grow to $2 trillion by the end of 2028, potentially creating about $1 trillion in new T-bill demand. Treasury Secretary Besant’s push to finalize these rules, stating they would “solidify the dollar’s role as the reserve currency,” is based on this calculation.

That said, it is not without risk. If demand is concentrated solely in short-term Treasuries, the Treasury’s borrowing duration shortens, and mass redemptions could shock the Treasury market. A Bank for International Settlements (BIS) study also pointed out that stablecoin capital flows can influence short-term Treasury yields. It is a variable that strengthens the dollar while making the Treasury market more sensitive.

Variable 3: U.S. Debt, the True Threat to Dollar Hegemony

Of the three, the one that can truly weaken the dollar lies within, not outside.

U.S. national debt surpassed $40 trillion in August 2026, and the [CBO projects that net interest costs will rise from $1 trillion in 2026 to $2.1 trillion by 2036](https://www.cbo.gov/publication/61882). I have organized the five sources of this debt separately /posts/us-national-debt-5-reasons/.

The power of a reserve currency comes from the belief that ’the borrowed money can be repaid.’ As debt grows, the government feels pressure to keep interest rates low, and the market reads that temptation early. The instance in August 2026, when the Treasury doubled its long-term debt buybacks and yields corrected within a day while the dollar index fell to a 3-month low, is a prime example. It was a scene where the dilemma described by economist Robert Triffin—that the more a country supplies its currency to the world, the more its own creditworthiness is eroded—was laid bare in numbers.

Comparison of the Three Variables of Dollar Hegemony

Categorized by their directional impact on the dollar:

Variable	Current Scale/Status	Impact on the Dollar
BRICS De-dollarization	Bilateral settlements among sanctioned nations, common currency is a concept	Weak downward pressure
Stablecoins	Almost all dollar-denominated, reserves are U.S. Treasuries	Short-term increase in dollar demand
U.S. Debt	$40 trillion, $1 trillion in interest (2026)	Core downward pressure eroding trust

BRICS and stablecoins may sound like stories from outside the dollar system, but one lacks influence, while the other grows by leaning on the dollar. Ultimately, it is Washington’s fiscal choices that will determine the future of the dollar.

The Future of Dollar Hegemony: What Should We Watch?

Watch these three numbers.

First is the dollar’s share in the IMF COFER. Whether the 50% threshold is breached serves as a symbolic benchmark. Second is the U.S. 30-year Treasury yield and term premium; market doubts about debt will show up here first. Third is the volume of stablecoin issuance and the composition of their reserves, which indicates the speed at which dollar demand is shifting to digital forms.

A scene where the dollar collapses suddenly is not yet visible in the data. Instead, the path toward a gradual loss of trust is already open, and the U.S. has opened that door itself. How this trend impacts KRW-denominated assets is discussed in the follow-up, The Triffin Dilemma and the World ‘After the Dollar’.

Notice: This article is based on publicly available information at the time of writing and is not a recommendation for any specific investment or financial product. Figures and policies are subject to change.