Rising of Multipolar World Order 

The Unipolar Bargain: China Produced, America Printed 

The previous piece traced how the US dollar earned its eighty-year run as the reserve currency of the world — backed first by gold, then, after the Nixon Shock of 1971, by nothing more than confidence in the American government, and underwritten from the 1970s onward by the petrodollar arrangement with Saudi Arabia and OPEC. In exchange for issuing the world’s currency, granted America a seigniorage and the muscle power required to maintain more than eight hundred military bases across roughly eighty countries to guarantee the sea lanes and stability that global trade depended on. For four decades, the arrangement rested on a simple division of labour: China produced, and America printed and protected. It was an arrangement that served both sides well, for a long time — until it couldn’t. 

 Cracks in the Old Arrangement 

The post-WW2 arrangement is now under strain. US federal debt has crossed $39 trillion, with interest payments now exceeding the American defence budget — meaning Washington is spending more to service old debt than to project power today. Central banks are also spreading reserves across a wider basket of currencies and gold rather than dollars alone, and the pandemic pushed every major economy to diversify supply chains rather than trust a single source. Washington, in short, can no longer comfortably afford the very policing role that underwrote the old bargain. This constraint is already visible on the ground: 

• In Europe, NATO’s own leadership expects further American troop withdrawals, following the Pentagon’s 2026 decision to pull thousands of troops from Germany.
• In West Asia, the costs of the recent US-Israel-Iran conflict have strained Gulf partners’ willingness to keep hosting an American security presence indefinitely.
• Afghanistan withdrawal of 2021 remains, the clearest signal that American commitments can end abruptly, on terms not of America’s choosing. 

In place of a single global policeman, a world of overlapping regional spheres appears to be emerging: Russia reasserting primacy over its Eurasian neighbourhood, China consolidating East Asia while expanding into Africa and Latin America, India anchoring the Indian subcontinent and Ocean region, and America consolidating closer to its own hemisphere. 

Direct Challenges to the Dollar’s Supremacy 

More direct challenges to the US dollar have followed in recent years. When the US and its allies froze Russia’s dollar and euro reserves after 2022 and expelled its banks from SWIFT, the message to the rest of the world was clear: dollar reserves offer no unconditional protection from geopolitical risk. BRICS — now expanded to include Iran, Saudi Arabia and the UAE — has encouraged members to settle trade in local currencies; Russia has built its own SWIFT alternative, SPFS; and China has built mBridge, a cross-border settlement platform with the UAE, Thailand and Hong Kong that has already processed transactions without a single dollar involved. The UAE’s 2026 exit from OPEC, after nearly six decades of membership, is part of the same rebalancing, as are the live tests of American power in the China-Taiwan standoff and the war in Ukraine. 

Underneath all this runs a quieter signal: central banks have simply stopped trusting other people’s vaults. Purchases have exceeded 1,000 tonnes of gold a year since 2022, and the world’s central banks now hold more gold than US Treasuries — a crossover last seen in the Bretton Woods era. France has pulled 129 tonnes out of the Federal Reserve in New York since 2025; Germany faces pressure to repatriate over a thousand tonnes from the same vault; India has cut its gold held abroad from 55 per cent in 2023 to just 22 per cent by 2026. Gold is quietly flowing out of London and New York and back into sovereign vaults around the world — the same vaults that were drawn down eighty years ago to help install the dollar on its throne in the first place. 

Perhaps the most underappreciated force working against the dollar is technology. Through India’s UPI, a person can send rupees and have the recipient receive roubles or dirhams in real time, with no dollar-denominated correspondent bank involved at all. As more countries link their own payment rails, the practical need for a single reserve currency to facilitate everyday cross-border trade keeps shrinking. 

India’s Moment: Democracy, Demography, Demand, and Diplomacy 

India is unusually well positioned in this rebalancing, resting on a functioning democracy, a young and growing population against an ageing developed world, a vast consumer base, deep technical and managerial talent, and an increasingly confident diplomatic posture. Its 2023 G20 presidency, during which it pushed for the African Union’s inclusion as a permanent member, and its vaccine diplomacy and disaster-relief responses worldwide, reinforced the same message: India positioning itself as an advocate for a more representative global order, not merely a rising power seeking a bigger seat at the existing table. 

That assertiveness is matched by a shift in trade strategy — away from sprawling multilateral frameworks and toward bilateral free trade agreements negotiated country by country, with the UAE, Australia and the UK already concluded, and talks underway with Canada, New Zealand and the US. The same instinct shows up in India’s championing of the IMEC corridor — rail, shipping and digital links from India through the UAE and Saudi Arabia into Europe, in the spirit of the old Silk Road, much as the India-Iran-Russia INSTC corridor already functions further north. Both point to the same idea: a multipolar world’s connective tissue being built through direct, bespoke corridors rather than any single power’s global infrastructure. 

India’s External Affairs Minister has captured this in a single phrase: India is “non-West” not “anti-West”. The distinction matters — it frames India’s rise not as rejection of the existing order but as a demand for its genuine decolonisation, one where power is no longer concentrated in the same handful of capitals that shaped the post-WW2 settlement. That extends to money itself: the shift toward a wider currency basket is less an attack on the dollar than a demand that the world’s monetary architecture catch up with its underlying economic and demographic realities. 

A New Bretton Woods Moment is Here 

Monetary diversification, fiscal constraint, retreating military commitments, direct challenges from Russia and China, and the quiet rise of powers like India are threads of the same story: a world order being renegotiated in real time, much as it was at Bretton Woods in 1944. The difference this time is that the negotiation has no single hotel, no single conference, and no single new hegemon waiting to take the old one’s place — just summits, digital payment rails, and abandoned military bases, one decision at a time, involving a far larger and more diverse set of participants than sat at that table in New Hampshire. What kind of order emerges, and what role India and other rising powers occupy within it, is not yet settled. It is a picture that will only reveal itself as more of these dots get connected. 

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