This is not to be confused with de-dollarization.
A country is de-dollared when it is forced to move away from the use of the US dollar as a substitute currency. This means another fiat currency is selected for reserves, as a medium of exchange, and as the basis for making loans.
This is not a willing choice. Whereas de-dollarization is is the option to move away from the USD, de-dollared is done out of necessity. The country simply cannot get a hold of enough of the currency to facilitate what is required.
The first area this usually arises is when central banks start to sell off their US Treasuries. Bonds and notes are the parking place for the currency. Selling them allows for the supplying of the commercial banks with USD. This is required since so much of the debt outstanding is denominated in that currency, requiring it for repayment.
Since the Great Financial Crisis, bank balance sheets were constrained as the Eurodollar System suffered a tightening of collateral. As sovereign debt increased in risk, the scope of what is considered high-quality was reduced to just Treasuries. This interrupted the flow of financing as short term lenders were hindered. This is the market that is estimated to facilitate roughly 90% of global trade.
