Abstract

This research paper delves into the intricate dynamics of the international financial system, with a primary focus on the enduring dominance of the US dollar and the growing global movement toward de-dollarization. It traces the historical evolution of the dollar's role as the world's primary reserve currency against the backdrop of the British pound's decline, examining both the factors that have sustained its prominence and those contributing to its diminishing influence. With a deep dive into the geoeconomic context since the 1970s, the paper highlights the undeniable benefits the United States has reaped from its dollar-centric system, often at the expense of other nations, whether industrialised or developing. It scrutinises the strategic use of the dollar as a tool for achieving geopolitical objectives, as seen in sanctions imposed on various countries. Furthermore, the research assesses global efforts to de-dollarize the international economy, evaluating the pros and cons of this endeavour. It explores potential scenarios for the dollar's future in relation to emerging currencies like the Chinese renminbi and the euro, as well as the feasibility of a global currency basket. In addition to payment modes, the paper explores means of payments that play pivotal roles in global cross-border transactions. It underscores the factors driving changes in payment infrastructure and their implications for the dollar and other currencies in transactions. Drawing from secondary research and critical discourse analysis on de-dollarization, this paper synthesises fragmented insights into a coherent narrative, facilitating a holistic understanding of the global economic paradigm and the pivotal role played by the US dollar. In our volatile and uncertain world, it explores the potential impacts of emerging technologies, shifting geo-economics, and the rise of non-Western powers on all stakeholders in the financial realm.

Keywords