De-dollarization is a slow process, not a revolution. The dollar is still the world's main reserve and trade currency. What is changing is that more countries are building alternatives: trade in local currencies, parallel payment systems and gold purchases by central banks. The main driver is the growing use of financial sanctions, which has pushed countries to look for ways around the American system.
For Israel this has three aspects:
- High exposure to the dollar. Exports, high-tech and reserves are tied to the Western financial system. That is stability, but also dependence.
- Partners on both sides of the line. The UAE has joined BRICS, and India is a founding member. Both are key partners of Israel, and deals with them may go through non-dollar channels.
- A fragmented financial system. A world with several payment systems requires Israeli companies to check which system their customers and suppliers are in.
Dr. Bella Barda-Bareket's article "The Sun Rises in the East" analyzes the rise of China, the new alliances and the world after American hegemony.