The U.S. dollar is rapidly losing its status as the global reserve currency. Five out of ten leading economies in the world and some other countries refused to use the dollar as their intermediary currency in trade.
This trend poses a huge risk to the dollar and the United States. Australia, the world's 12th-ranked economy, has now joined a growing list of nations that have agreed to no longer use the dollar in bilateral trade with China. China, ranked 2nd after the U.S., also has similar agreements with Japan (ranked 3rd), Brazil (6th), India (9th), and Russia (10th).
Although one-sided agreements between China and the countries listed above took place for some period of time, last week the BRICS agreed to establish a development bank to compete with the IMF, ushering in a new era of a post-dollar world.
Moreover, Brazil potentially agreed to drop the dollar in bilateral trade with China some time ago, but recently announced it officially with $30-billion annual currency swap which is to facilitate about 50% of all trades between the two countries.
In addition to agreements with China, some of these nations have made other similar agreements with each other. In 2011 India and Japan set up $15-billion swap in each other's currency to carry out their bilateral trade. The sanctions against Iran have not prevented them from trading crude oil with China, Russia, and India in any currency, except the U.S. dollar.