To the best of my understanding what happened is that the fed bought up overpriced bonds from financial institutions like Goldman Sachs, which wasn’t a significant issue when interest rates were under their control between 2008 and 2022. However, the loss of credibility on inflation led to rate hikes, causing accumulated losses. Fed “losses” are banks “gains” in terms of revenues, that ultimately become net income and turn into capital. Rate hikes and macro-management of money markets are designed to make borrowing expensive, protect big banks, and reduce demand by pushing small and mid-cap stocks into bankruptcy. This approach seems poised to result in further consolidation and monopolization of capital.

I suspect that's a big part of it. With dollar based economy shrinking there's less demand for the dollar. That means when the US issues more currency there's less of a market to absorb it. Specifically, oil being sold outside the dollar is a very significant development. Pretty much every modern economy needs oil to operate, and before you had to get dollars in order to buy oil. Nowadays that's no longer the case.

The US made an incredible strategic blunder by freezing Russian foreign assets because it shows the whole world that western financial system is not safe. If a country starts making decisions that go against western interests then the west will steal their assets, and that makes it impossible to have sovereignty. I suspect that's a huge factor driving dedollarization right now.