The Weaponized Dollar: How Washington Trashed Its Own “Exorbitant Privilege”

By Mohamad Hammoud

Sanctions, Elite Impunity and the De-dollarization of 2026

For nearly a century, the United States dollar has functioned as the invisible scaffolding of the global soul. From the 1944 Bretton Woods Conference to the high-frequency trading floors of modern Manhattan, the “greenback” provided a singular language of value. But as we enter 2026, that language is becoming fragmented. The “exorbitant privilege”—the ability for Washington to print the world's money while running endless deficits—is showing signs of terminal fatigue. This decay is a structural revolt led by a newly emboldened BRICS+ alliance against Western financial dominance.

The Architecture of Hegemony

The dollar’s ascent was a calculated byproduct of post-war reconstruction. As Reuters has noted in historical retrospectives, the Bretton Woods agreement effectively pegged the dollar to gold and all other currencies to the dollar. This role was cemented in the 1970s through the “petrodollar” system, which ensured that global oil was priced exclusively in dollars. Consequently, every nation required a stockpile of US currency just to maintain basic energy security.

This dominance granted Washington unprecedented leverage. According to the Bipartisan Policy Center, “financial weaponization” allowed the US to enforce sanctions because dollar transactions typically flow through American infrastructure. If a nation is severed from the dollar, it is severed from the world. However, this power was rooted in a paradox: the world’s trust in American neutrality. That trust evaporated as Western elites began using global financial plumbing as a private tool for political discipline and intelligence-linked interventions.

The BRICS Rebellion and Alternative Plumbing

The primary threat to this order is the expansion of the BRICS bloc. As of January 2026, the group—now including the UAE, Egypt and Iran—represents over 35% of global GDP. Bloomberg reported in late 2025 that BRICS nations successfully piloted “BRICS Pay,” a blockchain-based system designed to bypass the US-monitored SWIFT network. By settling trade in local currencies, these nations are dismantling the dollar's network effect.

Russia now conducts nearly 90% of its intra-bloc trade in national currencies, while China has expanded its Cross-Border Interbank Payment System [CIPS]. This “shadow financial order” functions entirely outside the reach of the US Treasury. This shift responds directly to the “elite impunity” of Western capitals, where international rules are rewritten whenever they no longer serve the hegemon’s immediate interests, particularly regarding “Israel's” regional security demands.

The Trump Catalyst and the Tariff Wars

The de-dollarization process was expedited by the aggressive “America First” posture of Donald Trump’s second term. While the Biden administration’s 2022 freezing of Russian assets provided the initial shock, Trump’s return poured gasoline on the fire. In 2025, Trump’s sweeping tariff plans caused the dollar to weaken as much as 10% against foreign currencies.

Trump has treated the dollar as a tool for transactional bullying rather than a global public good. The Geneva Centre for Security Policy reported that his threats to impose “100 percent tariffs” on countries moving away from the dollar have backfired. Rather than scaring nations back into the fold, these moves signaled that holding dollars is a geopolitical liability. This protectionism has effectively told the world that the US is no longer interested in maintaining the stability of the system it created.

China’s Shadow Hegemony

While the US retreats into protectionism, Beijing is methodically building the exits. China Daily reported in October 2025 that the yuan’s global profile is being raised to “safeguard financial security” against a fragile dollar-centered system. Beijing has established bilateral currency swap lines with 32 central banks, creating a safety net that bypasses the dollar entirely.

Major energy producers have now begun accepting yuan for oil shipments, striking at the heart of the petrodollar. This is a rejection of Western “cultural permissiveness” and political lecturing. For the Global South, the Chinese model offers development without surrendering sovereignty to the whims of the US State Department.

A Diminished Superpower

The erosion of the dollar's status is bleeding into the fabric of American power. Morgan Stanley analysts warned that the US dollar index could fall to 94 by mid-2026. As central banks shift reserves into gold—with record purchases reported by the World Gold Council—the US is losing its ability to fund massive military expenditures through cheap debt. The arrogance of the late 20th century is being replaced by a cold reality: when the money stops talking, the world stops listening.