The value of the U.S. dollar is starting to separate from its famous “bang for your buck” mantra. There are several reasons why.
Compared with its global competitors, the American dollar fell short in 2025, declining 10% on the Dollar Index, which measures its value against other foreign currencies, Business Insider reports. There are several reasons that serve as catalysts for the dollar’s depreciation, including the Federal Reserve’s decision to cut interest rates, which makes the dollar less attractive to investors.
Then there are President Donald Trump’s tariff wars, which have put specific markets in turmoil and put a damper on consumers’ pockets. Trump once took a contradictory stance on the weaker dollar, claiming the country would make more money as it declined.
“When we have a strong dollar, one thing happens: It sounds good,” he said during a July press conference. “But you don’t do any tourism. You can’t sell tractors, you can’t sell trucks, you can’t sell anything.”
He was right: a declining dollar means prices will continue to rise. In November 2025, prices were up 2.7%. While it was under experts’ expectations, consumers were left with less buying power.
According to Wired, in 2026, the real competition for the dollar will be technology—specifically, alternative payment systems structured to bypass dollar-based channels. There seems to be a race to create the best systems
around the world. mBridge is described as a project where central banks in China, Hong Kong, Thailand, and the United Arab Emirates work with the Bank for International Settlements in an effort to build a system that will permit countries to pay each other almost instantly by using their own digital versions of national currencies.Another budding system is BRICS pay, allowing BRICS+ countries like Brazil, Russia, India, China, and South Africa to send money to each other for trade and investment purposes directly in their own currencies. The systems are thought to make trading faster, cheaper, and less dependent on the dollar.
The moves could also make traveling abroad more expensive for Americans.
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