Standard Chartered Plays Down De-Dollarization Fears but Warns of Dollar Weakness

Standard Chartered has dismissed extreme de-dollarization scenarios while acknowledging mounting pressures on the U.S. dollar's dominance. The bank assigns a 65% probability of dollar depreciation over the next year, forecasting a potential 1-10% decline by mid-2026.

Currency substitution efforts and cryptocurrency adoption are reshaping global monetary dynamics, though replacing the dollar as the world's reserve currency remains challenging. "Regime shifts can occur rapidly," the bank cautioned, highlighting the need for vigilance despite the dollar's entrenched position.

Alternative currencies like the Euro and Chinese yuan face structural obstacles, creating opportunities for digital assets to fill gaps in cross-border transactions. The analysis suggests crypto adoption may accelerate as traditional currency systems show strain.