The dominance of the U.S. dollar in international finance presents a persistent challenge for developing and emerging market economies (EMEs). This paper examines the core problem, widely known as the "original sin," where EMEs are unable to borrow in their own currencies, forcing them into dollar-denominated debt. This dynamic creates significant vulnerabilities, including acute exchange rate risk, the potential for self-fulfilling debt crises, and persistent trade imbalances. Through an extensive literature review and analysis of these mechanisms, this paper argues that the overreliance on the U.S. dollar acts as a structural impediment to stable economic development. It then explores the primary proposed solution: the shift towards bilateral and multilateral trade settled in local currencies. By analysing the benefits—such as reduced exchange rate risk, lower demand for USD reserves, and enhanced monetary policy autonomy—and examining recent initiatives by BRICS and other nations, the paper concludes that fostering local currency settlement systems is a critical step towards building a more resilient and equitable international financial architecture.