 The hollow dollar?Alexander Evans LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library Abstract: This paper explores whether the US dollar’s dominance in global finance – long a pillar of American geopolitical influence – is being quietly eroded. While the dollar remains the world’s primary reserve currency, its centrality in international payments is increasingly contested. The weaponisation of the dollar, particularly through sanctions and the extraterritorial reach of the New York banking licence, has prompted strategic responses from states such as China, Russia, and India. These strategic responses include the development of alternative payment systems, local currency trade settlements, and digital infrastructure. The paper argues that a ‘hollowing’ of the dollar’s infrastructural dominance is underway – (perhaps very) gradual, partial, but geopolitically significant. This shift may not end dollar supremacy, but it could fragment the global financial system, weaken US sanctions leverage, and diminish the centrality of New York and London as financial hubs. The implications for global order are subtle but potentially profound. A less dollar-dependent system may facilitate a more multipolar world yet diminish liberal democratic power. JEL-codes: F3 G3 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:141656 Access Statistics for this paper More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC. |
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