President Trump’s Playbook for Protecting the US Dollar’s Global Power

President Trump is taking decisive actions to maintain the US dollar’s global dominance, amidst a shifting financial landscape where countries like China, Hong Kong, Thailand, the UAE, and Saudi Arabia are exploring alternatives.

• mBridge: A cross-border CBDC to bypass the US dollar and SWIFT
• BIS Withdrawal: US pressure leads to exit from mBridge project
• Trump’s Threats: 100% tariffs for countries moving away from the dollar
• US CBDC Ban: Trump bans CBDCs citing financial stability and privacy concerns
• Stablecoin Endorsement: Dollar-backed stablecoins to expand global influence

Project mBridge, a cross-border central bank digital currency (CBDC), represents a bold move by China, Hong Kong, Thailand, the UAE, and Saudi Arabia to revolutionize international trade. A CBDC is a digital form of a country’s currency, issued by its central bank. The mBridge initiative aims to streamline transactions without the need for the US dollar or the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a global financial messaging network. The project’s potential to disrupt traditional financial systems caught the attention of the Bank for International Settlements (BIS), which initially supported it but withdrew just before the US election in 2024. “The Americans demanded [the BIS] stop because it’s a threat,” a participant revealed, emphasizing Washington’s fear that mBridge could be used to evade dollar sanctions.

Trump’s response to these developments has been swift and unapologetic. He took to Truth Social to lay down the law: “The idea that the BRICS countries are trying to move away from the dollar, while we stand by and watch, is OVER. We are going to require a commitment from these seemingly hostile countries that they will neither create a new BRICS currency nor back any other currency to replace the mighty US dollar. If not, they will face 100 per cent tariffs and should expect to say goodbye to selling into the wonderful US economy.” His stance reflects a strong commitment to maintaining the US dollar’s dominance, especially given its significant role in global finance. The International Monetary Fund (IMF) reports that 58% of central bank reserves are held in US dollars, while SWIFT data indicates that 49.1% of global transactions last year were in dollars, marking a 12-year high.

In addition to threats, Trump issued an executive order in January 2025, banning CBDCs within the US, citing threats to financial stability, privacy, and sovereignty. A CBDC could potentially undermine the traditional banking system and raise concerns about government surveillance of financial transactions. Simultaneously, Trump endorsed dollar-backed stablecoins, digital currencies pegged to the US dollar, as a means to extend the dollar’s reach globally. His strategic pivot towards stablecoins is not without controversy, particularly with his appointment of Howard Lutnick as commerce secretary. Lutnick, with ties to the Tether stablecoin, faced scrutiny during his Senate hearing, with Senator Elizabeth Warren questioning potential conflicts of interest. Despite these concerns, Lutnick was confirmed for the position, signaling Trump’s commitment to embracing new financial technologies.

The global financial landscape is indeed evolving, with central banks hoarding gold at record levels, according to the World Gold Council. This move might be seen as a hedge against the dollar’s dominance, as gold has traditionally been viewed as a safe haven asset. Meanwhile, China’s Cross-Border Interbank Payment System (CIPS) is expanding, now boasting 160 member banks and an 80% increase in transactions since 2022. CIPS serves as an alternative to SWIFT, facilitating transactions in Chinese yuan and other currencies, indicating a broader shift away from US dollar-centric systems.

While Trump’s aggressive policies aim to reinforce the dollar’s position, they also raise questions about potential unintended consequences. Critics argue that such measures could lead to economic backlash or increased global financial instability. The stablecoin market, currently valued at about $220 billion, remains a small but growing segment of the $6 trillion US capital markets. Trump’s endorsement of stablecoins suggests a belief in their potential to bolster the US dollar’s influence worldwide.

As the financial world continues to evolve, the battle for monetary dominance is far from over. Trump’s playbook to protect the US dollar’s global power is just the beginning of a new chapter in international finance.

Key Takeaways and Questions

• What is mBridge and who developed it?

  mBridge is a cross-border central bank digital currency (CBDC) developed by China, Hong Kong, Thailand, the UAE, and Saudi Arabia to trade without needing the US dollar or SWIFT.

• Why did the Bank for International Settlements withdraw from the mBridge project?

  The BIS withdrew from the mBridge project due to pressure from the US, as it was seen as a threat to the dollar’s dominance and a potential tool to evade US sanctions.

• What actions has Trump taken to protect the US dollar’s global power?

  Trump has threatened severe economic consequences for countries moving away from the dollar, banned CBDC usage in the US, and endorsed dollar-backed stablecoins to expand the dollar’s global influence.

• How significant is the US dollar in global transactions according to SWIFT data?

  SWIFT data shows that 49.1% of global transactions last year were in US dollars, marking a 12-year high.

• What is the role of Howard Lutnick in Trump’s administration, and how is he connected to Tether?

  Howard Lutnick is Trump’s pick for commerce secretary and has ties to the Tether stablecoin. Despite concerns raised by Senator Elizabeth Warren about conflicts of interest, he was confirmed for the position.

• How are central banks reacting to the dollar’s dominance according to the World Gold Council?

  Central banks are hoarding gold at record levels, indicating a hedge against the US dollar.

• What is the current market value of stablecoins?

  The stablecoin market is currently valued at about $220 billion, which is a fraction of the $6 trillion US capital markets.