How de-dollarisation is changing international payments

You may have heard about de-dollarisation. It’s simply the gradual move away from using the US dollar as the default currency in international trade.

In practice, you’ll often see it in a very concrete way: how you pay your suppliers. 

For many companies, suppliers in certain regions are now asking to be paid directly in their local currency, rather than accepting USD as they often did in the past. 

This shift is also visible at a broader level. According to data from the International Monetary Fund (IMF COFER database), the share of global foreign exchange reserves held in US dollars has declined from over 70 percent in the early 2000s to around 58 percent in recent years, pointing to a gradual diversification into other currencies. 

Data source: https://data.imf.org/COFER

The cost of routing everything through USD 

For many companies, using USD as an intermediary currency has been the standard approach for years. 

A typical flow looks like this: CHF → USD → local currency 

Each step involves a conversion, and each conversion comes with a spread. 

When this structure is used systematically, it can introduce costs that are not always visible at first. Over time, these costs can accumulate and impact profit margins, especially for companies with recurring international payments. 

Suppliers are asking to be paid in local currency 

This structure has worked for years, but many suppliers are now pushing for a different approach. In several markets, particularly in Asia and the Middle East, they now prefer to receive payments in their domestic currency. 

There are a few reasons behind this, such as: 

• avoiding uncertainty on the value of incoming payments 

• avoiding the need to convert USD into their local currency, which adds cost 

For Swiss companies who import goods and services, the payment currency becomes part of the commercial negotiation, often playing a role in establishing and maintaining supplier relationships. 

Managing foreign exchange risk across multiple currencies 

As companies start to pay in a wider range of currencies, their foreign exchange exposure becomes more complex. 

Instead of managing risk mainly on USD, they may now be exposed to currencies such as the Chinese yuan (CNH or CNY), Japanese yen (JPY), Indian rupee (INR) or UAE dirham (AED). 

These currencies can behave very differently from each other, with varying levels of volatility depending on market conditions. 

This shift does not necessarily increase or reduce risk overall, but it changes where that risk sits and how it needs to be managed. 

Planning and forecasting becomes more demanding and requires the right tools to manage and mitigate foreign exchange risk and its impact on profit margins. 

As companies move away from USD, payment structure plays a greater role 

When payments are made weeks or months after an agreement, exchange rates can move significantly in the meantime. 

This becomes even more relevant when dealing with currencies that are more sensitive to global conditions. The Bank for International Settlements notes that exchange rate volatility tends to be higher in emerging market currencies, particularly during periods of global uncertainty. 

For international businesses, this means that the final cost of a transaction can differ from the initial expectation, directly affecting profit margins even when the commercial terms have not changed.  

In a context where companies increasingly transact outside of USD, the ability to pay and collect in different currencies, along with decisions such as when to convert and how to structure payments, directly influence the financial outcome of each transaction. 

Companies are adapting their payment management strategies to protect profit margins 

As a result, some companies are rethinking how they organise their payments and manage their currency exposure. 

This includes paying suppliers directly in their local currency, reducing unnecessary conversion steps, monitoring exposure across multiple currencies, and using hedging tools when there is a gap between agreeing on a price and making a payment. 

The objective is to gain greater control over how currency movements impact costs and profit margins. 

How payment infrastructure supports multi-currency transactions 

As you move away from using USD as the default currency, the way you handle payments starts to play an increasingly important role. 

To do this effectively, you need the ability to operate across multiple currencies and control when and how conversions take place. 

This is where the right payment setup makes a difference. 

With SwissFx, you can access over 140 currencies, pay your suppliers in their local currency, and convert funds only when it makes sense for your business, with tight spreads that help reduce your overall FX costs. 

Combined with risk management tools, this allows you to plan ahead with greater clarity and maintain control over your costs and revenues.