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AI and CBDCs Challenge the Dollar’s Global Dominance as Digital Finance Accelerates
CBDCs and AI Disrupt the Dollar Era – The U.S. dollar’s dominance has long underpinned global finance, but a new wave of digital transformation—from central bank digital currencies (CBDCs) to AI-powered financial systems—is testing that supremacy for the first time in decades.
According to IMF COFER data, the dollar’s share of global foreign exchange reserves dropped to 56.32% in early 2025, its lowest point since the euro’s launch. At the same time, 94% of central banks are experimenting with CBDCs, signaling an accelerating shift toward digital state money.
Economist Dr. Alicia García-Herrero of Natixis notes that the dollar remains the anchor of global reserves but faces gradual erosion. “If the USD’s share falls below 55% by 2027 and CBDC settlements exceed $1 billion annually, that will mark a structural turning point,” she says.
Stablecoins Reinforce—and Challenge—the Dollar
Despite the shift, stablecoins still act as digital extensions of dollar liquidity. Roughly 99% of all stablecoins—including USDT and USDC—are pegged to the U.S. dollar. García-Herrero warns, however, that a yuan-backed token gaining 10–15% of market share could ignite geopolitical tension, with true fragmentation emerging once non-dollar tokens reach 20% of global settlements.
On-chain settlement has already exceeded $35 trillion annually, more than twice Visa’s throughput. Yet in high-inflation economies like Argentina and Turkey, stablecoins provide financial stability by serving as informal dollar rails.
Tokenization and the Rise of Digital Assets
The tokenization of real-world assets is moving from theory to practice. Franklin Templeton reports over $5.5 billion in tokenized treasuries, and García-Herrero forecasts that 5% of new sovereign debt could be issued on-chain by 2028, led by Asia and Europe.
Meanwhile, China’s e-CNY continues to expand rapidly, processing 7 trillion yuan in transactions by mid-2025—showing how state-led digital finance can scale under centralized control.
A Diffusing but Durable Dollar Order
Across CBDCs, AI finance, and blockchain innovation, García-Herrero’s data-driven outlook suggests evolution, not revolution. The dollar’s reach is diffusing, not disappearing, as global finance becomes more programmable, data-driven, and decentralized.
Ultimately, the future of money may hinge less on disruption than on governance—on how transparency, trust, and digital control reshape global liquidity in the AI age.
