The dominance of the US dollar in global finance is one of the most enduring features of modern economics. For decades, it has reigned as the world's primary reserve currency, a symbol of American economic and military supremacy.
But could this hegemony be nearing its end? A recent prediction by JP Morgan CEO Jamie Dimon has sparked a new round of speculation on how long the dollar can maintain its grip.
A Warning from the Top of Wall Street
In a bold statement, Jamie Dimon warned that the US dollar could lose its status as the world’s reserve currency within the next 40 years. His reasoning? If the United States fails to maintain its position as the preeminent military and economic power, history suggests its currency dominance will fade. He emphasized that the dollar's status is not guaranteed by default, but rather contingent on America’s sustained global leadership.
While this outlook is not a certainty, it does reflect growing concerns within financial circles about rising alternatives to the dollar and shifting geopolitical dynamics.
The rise of BRICS (Brazil, Russia, India, China, and South Africa), along with their plans to create a new currency for cross-border trade, is one such signal of change.
BRICS and the Push for De-Dollarization
The BRICS bloc has grown in economic influence and is actively challenging the global financial system’s reliance on the greenback. By promoting bilateral trade in local currencies and exploring digital alternatives, BRICS is laying the foundation for a more multipolar currency future.
Although the BRICS currency project remains in its early stages, its political symbolism is strong. It represents a collective effort by emerging economies to reduce vulnerability to US-centric financial policies, particularly sanctions and interest rate shifts. The movement toward de-dollarization is not just about money; it’s about power.
Southeast Asia: Watching, Waiting, and Adapting
In the middle of these tectonic shifts lies Southeast Asia, a region highly interconnected with both the US and China. Countries like Indonesia, Malaysia, and Thailand have diversified their foreign reserves in recent years and begun engaging in currency swaps that reduce reliance on the dollar.
For instance, Indonesia and China have already implemented local currency settlements for bilateral trade.
The region’s increasing openness to digital finance, including central bank digital currencies (CBDCs), adds another layer of preparedness. While ASEAN nations are not actively trying to dethrone the dollar, they are strategically hedging against its potential decline.
For small to mid-sized economies, reducing exposure to a single dominant currency is a form of economic resilience.
A New Financial Reality or Just Speculation?
It’s important to note that while the dollar faces challenges, no other currency currently matches its liquidity, trust, and global acceptance. The euro has stability but limited reach beyond Europe.
The Chinese yuan is increasingly used in trade but is constrained by capital controls. Even with BRICS’ ambitions, a coordinated and trusted alternative is still far from operational.
Dimon’s 40-year horizon is not a prophecy, but a reminder. The dominance of a currency is not eternal. It depends on how well a country or a bloc of countries, manages its economy, maintains institutional strength, and adapts to global change.
What This Means for the Future of Southeast Asia
For Southeast Asian countries, the likely scenario is not a sudden collapse of the dollar but a slow erosion of its supremacy. This presents both risks and opportunities. As global currency power becomes more fragmented, ASEAN economies can assert greater independence in trade agreements, investment flows, and monetary policy.
The key is strategic foresight. Policymakers in the region must continue developing robust local financial markets, deepen intra-ASEAN cooperation, and explore alternatives such as regional digital currency systems.
If done well, Southeast Asia could benefit from the end of single-currency dominance by carving a more balanced and resilient economic path.
