The principle of dollarization involves using the US dollar as a global exchange currency to avoid currency crises and devaluation problems . On the other hand dedollarization refers to the replacement of the US dollar with another currency based on the belief that it should be a global currency .
Geopolitical Factors Driving Dedollarization
Recent geopolitical changes have brought dedollarization to the agenda again . Examples like Saudi Arabia accepting exchanges in yuan for oil purchases, China and Brazil reaching agreements to trade in their own currencies and Russia shifting from the US dollar to the yuan . These tensions and conflicts contribute to the growing possibility of dedollarization .
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