A global currency reset refers to replacing the world’s primary reserve currency—such as the U.S. dollar—with a different currency or system. Rumors of a “Rio Reset” at the Brazil, Russia, India, China, and South Africa (BRICS) Summit in July 2025 suggest member nations might introduce such an alternative.
In this article, we’ll explore whether that could happen. We’ll explain what makes a currency a global reserve, then look at how the U.S. dollar came to dominate after World War II, and finally explore why a quick swap is unlikely and how any change could gradually emerge.
Table of Contents
What is a reserve currency?
A reserve currency is simply money governments and central banks keep on hand because they trust it will hold its value. They use these reserves to do such things as pay for imports, settle international debts, and step in when their own currency faces trouble.
By holding a trusted reserve, nations may be in a better position to smooth out trade imbalances and avoid sudden shocks if their local money weakens.
Reserve currency definition and function
Central banks accumulate and hold reserve currency in large amounts—often in the form of government bonds or cash—so they have funds available for international transactions and emergency support.
Because reserve assets are considered reliable, issuers may benefit from lower interest rates: lenders charge less when they know they’re being repaid in stable money.
A strong reserve currency, therefore, signals global confidence and can reduce borrowing costs for its home country.
Key characteristics of a reserve currency
Reserve currencies share a common set of qualities that make them reliable stores of value and effective tools for international trade. Some important characteristics of a reserve currency include the following:
- Backed by a large, stable economy: The issuing nation must have solid growth, sound institutions, and predictable policies.
- Widely accepted in global trade contracts: Sellers worldwide routinely price goods and services in that currency.
- Highly liquid: Central banks can buy or sell large amounts without causing wild swings in the currency’s exchange rate.
- Relatively low inflation and price stability: The currency maintains purchasing power over time, preserving value for holders.
Taken together, these characteristics help explain why only a few currencies earn and keep reserve status—countries trust them to settle trade, back debts, and provide stability in a crisis.
The U.S. dollar as a global reserve currency
Since the mid-20th century, the U.S. dollar has held a special role in global finance: It’s a currency that central banks across the globe keep on hand to back international trade and government debts. Several major milestones explain how the dollar achieved—and kept—this status.
The Bretton Woods system
In July 1944, individuals delegated to represent 44 allied nations gathered in Bretton Woods, New Hampshire, to establish a stable postwar monetary order.
Under the newly created Bretton Woods system, each country fixed its currency’s exchange rate to the U.S. dollar, and the United States guaranteed dollars could be exchanged for gold at $35 per ounce.
Two new institutions were created as a part of the Bretton Woods system:
- International Monetary Fund (IMF): Designed to oversee exchange-rate adjustments and provide short-term loans to countries facing balance-of-payments (BOP) problems. BOP issues can occur when a country spends more on imports and overseas investments than it earns from exports and foreign investment.
- World Bank Group: Created to fund reconstruction following World War II and development projects in countries less economically developed. This institution was initially known as the International Bank for Reconstruction and Development.
By anchoring global currencies to a gold-convertible dollar, the Bretton Woods system sought to foster predictable exchange rates to support international trade and economic recovery.
Collapse of the Bretton Woods system
In August 1971, mounting U.S. budget and trade deficits led to a reduction in the country’s gold reserves. President Nixon announced that the dollar would no longer be convertible into gold, effectively ending the Bretton Woods system.
Over the next year and a half, currency values were adjusted, and by March 1973, most major currencies began floating freely against each other, with exchange rates set by market supply and demand.
Even without gold backing, the dollar remained the dominant reserve currency—supported by the depth of U.S. financial markets and broad international confidence.
Today’s reserve status
A recent IMF report shows that, as of the fourth quarter of 2024, total global foreign exchange reserves stood at $12.36 trillion, with the U.S. dollar accounting for 57.8% of allocated reserves.
Although the dollar’s share has experienced dips over time, it remains the most dominant world reserve currency. Per data from the IMF, as of the fourth quarter of 2024, the Euro was the next largest global reserve currency at 19.8% of allocated reserves, followed by the Japanese yen at 5.8%.
Oil and other commodities trade almost exclusively in U.S. dollars, helping ensure steady demand. Plus, significant global dollar holdings allow the U.S. government to issue debt at relatively low interest rates.
What is a global currency reset?
A global currency reset describes a coordinated, large-scale change in which the dominant world reserve currency—today, the U.S. dollar—is replaced or revalued in favor of a different currency or group of currencies.
This goes beyond routine central bank moves (like adjusting interest rates) or a single country revaluing its currency. Rather, it implies an agreed-upon shift in the primary reserve currency used worldwide.
Some catalysts for the speculation about a global currency reset could include:
- Rising U.S. deficits and fiscal stability concerns: Large national debt may undermine confidence in the U.S. dollar’s long-term value.
- BRICS economic influence: As Brazil, Russia, India, China, and South Africa grow in global trade, their influence may lead to some alternatives to dollar-based transactions.
- Inflationary pressures and recession worries: Sustained high inflation—such as in the years following the pandemic—and growing concerns about a potential recession may have caused some people to worry about the long-term stability of the dollar.
Global currency reset rumors may stem from gold dealer blogs or fringe finance forums, which may not have backing from official sources. Real evidence would include formal statements or agreements from bodies like the IMF, major central banks, or reputable international summits.
2025 Rio reset rumors
The term “Rio Reset” refers to a rumor that, during the 17th BRICS Summit, taking place July 6-7, 2025, in Rio de Janeiro, member countries might introduce a new monetary framework that challenges the U.S. dollar’s position as the world’s primary reserve currency.
Mentions of a “Rio Reset” have appeared on various gold-dealer blogs, niche financial websites, and social media posts tied to BRICS economic cooperation themes.
The official BRICS website outlines cooperation in finance, economy, and trade—areas that include expanding local currency transactions and promoting trade facilitation, amongst other initiatives.
The outlined efforts to boost intra-BRICS cooperation in the areas of trade and investment may have fueled speculation about a global currency reset.
Is a global currency reset possible?
In the short term—for example, by 2025—a reset that truly displaces the U.S. dollar as the dominant reserve currency is unlikely. Such a move would require a high level of coordination among dozens of central banks and unwavering market confidence in whatever replaced the U.S. dollar.
There simply isn’t a ready-made alternative to the U.S. dollar with the same liquidity, deep capital markets, and institutional trust.
Over the longer term—spanning years or decades—a gradual shift could occur as countries develop alternative arrangements and diversify their reserves. Even so, the dollar’s entrenched dominance and the speed of international finance mean change would likely unfold slowly, not in a sudden overhaul.
What happens to debt in a currency reset?
If a global currency reset takes place, governments would likely renegotiate their bonds—loans they’ve issued—to reflect the new currency’s value, which could change repayment amounts or interest terms.
Business and personal loans—like mortgages, car payments, and credit cards—could also be adjusted or lose value if inflation rises sharply after the reset.
At the same time, a significant drop in the dollar’s purchasing power could make your cash savings buy less, pushing everyday costs higher. To protect themselves, banks and lenders might charge higher interest rates on new loans, making borrowing more expensive.
In such an environment, some investors may turn to gold or other tangible assets, hoping those assets will hold value better than paper money when currencies weaken. To get started with buying gold or opening a gold IRA, our top pick is American Hartford Gold.
Stay informed about world reserve currency
In a shifting global economy, it’s wise to keep your financial plan current. Ensure you have an accessible emergency fund, are steadily paying down high-interest debt, and periodically review your investments to ensure they still fit your objectives.
For reliable information on reserve-currency developments, turn to official sources—IMF reports, Federal Reserve statements, and respected publications—rather than rumor-driven blogs or social-media chatter.
Setting up news alerts for terms such as “reserve currency” or “BRICS summit” may help you spot key updates. If interpreting these developments feels overwhelming, a fee-only advisor like MoneyPickle or another reputable firm may be able to help you translate global shifts into a personalized, actionable financial strategy.
