What is the difference between de-dollarization and dollarization?

The American dollar has historically dominated the world economy. It is widely used as the primary currency for commodities like oil, a reserve currency kept by central banks and for international trade settlements. De-dollarization, on the other hand, is a reaction to worries about the risks and weaknesses brought on by the dollar's hegemony.

Is de-dollarization a viable replacement for the dollar?

De-dollarization could help level the playing field for economies outside the U.S. However, countries also depend on having a stable currency to hold in reserve and conduct international business. At least in the near term, there appears to be no viable replacement for the dollar at the heart of the global financial system.

Will de-dollarization affect exchange rate volatility?

If there is a specific catalyst for the move, de-dollarization could also result in heightened exchange rate volatility, especially as over 60 currencies are pegged to the greenback. However, while some signs of de-dollarization are emerging in currency markets, the dollar is thus far still maintaining its dominance.