The gradual collapse of dollar hegemony paves the way for a just international order

The dollar-centric global financial system, established by the US in the aftermath of World WarII through the Bretton Woods Agreement, is steadily unraveling. This decline is an objective reality.Both the creators of this system and the developing countries, which have suffered its detrimentalglobal effects, are becoming increasingly aware of the waning dominance of dollar hegemony. Butwhat are the implications of the de-dollarization trend in the international sphere, and what will bethe outcomes of the strategies adopted by both imperialist powerhouses and developing nations inresponse to this shift? This issue addresses these questions.

There is a clear parallel between the rise of multipolarity and the de-dollarization process. The worldis transitioning towards multipolarity, both as a driver and a result of the diminishing dollar dominance.The efforts of Russia and China to establish alternative forms of financial cooperation, despite facingopposition from the US-led Atlantic alliance, are gaining substantial ground. More significantly, theseinitiatives are becoming emblematic of a broader movement within the developing world.

The weakening of dollar hegemony is offering the global community, long constrained by imperialistfinancial controls, a much-needed reprieve. This shift is marked by increased trade in national currenciesamong developing countries, the formulation of collaborative policies by central banks, the emergence ofalternative payment systems to challenge the US-dominated SWIFT, and proactive measures within theBRICS+6 framework to hasten the dissolution of the dollar empire. Furthermore, institutions like the AsianInfrastructure Investment Bank and the New Development Bank are emerging as viable financial alternativesfor the developing world, in contrast to the IMF and World Bank, which have traditionally perpetuateddollar hegemony. Additionally, the Belt and Road Initiative, underpinned by mutually beneficial funding,heralds a new era of multilateral international cooperation. Consequently, we are witnessing the formationof financial cooperation mechanisms that align with the vital needs of developing states, replacing theAtlantic-centric system that often functioned as a tool of international leverage and extortion. Ultimately,the decline of dollar hegemony is setting the stage for a more just international system.

BRIQ Chairman Adnan Akfırat and Editorial Board Coordinator Efe Can Gürcan participated intwo distinct international forums held in China this September. During the 16th Forum of the WorldAssociation for Political Economy (WAPE), which took place on Pingtan Island from September 25-27, 2023, Akfırat was elected Vice President of WAPE, while Gürcan was elected as a WAPE Councilmember. Additionally, Gürcan received the WAPE’s “2023 Distinguished Achievement Award in PoliticalEconomy.” The forum’s theme, “China’s Modernization and the Outlook of World Modernization,”facilitated discussions on China’s unique modernization approach, distinct from Western models, andexplored various pathways for national and global modernization.

Akfırat and Gürcan also presented at the “4th International Academic Forum on Human Civilizationand Cultural Development” held at the Northwest Polytechnic University (NPU), BRIQ’s publishingpartner, in Xi’an on September 28–29, 2023. This significant academic event, commemorating the 85thanniversary of NPU, featured lively discussions with nearly 200 participants, including experts, academics,and students from the USA, UK, Russia, Greece, Canada, Mexico, Turkey, and several other countries.

For detailed information about both events, visit BRIQ Online Working Papers at https://arastirma.istinye.edu.tr/merkezler/kuycam/yayinlar under the title “Conference Reports”.




Based on Marxist monetary theory, this paper investigates the formation mechanism of dollarization, its real-world impacts, and corresponding countermeasures. From a financialization perspective, the internationally dominated monetary system by the U.S. dollar has undergone three stages: the golddollar system, the oil-dollar system, and the institution-dollar system. Among them, the institutiondollar system, also known as the global financialization system, is a fusion of commodity and financial markets, domestic and international markets, achieved through financialization under the neoliberal institutional framework. It has further promoted the expansion of the U.S. dollar’s international monetary power. The expansion of international monetary power is primarily achieved through dollarization, and global dollarization is realized through three financialization mechanisms: commodity financialization, technological financialization, and institutional financialization. Commodity financialization serves as the foundation for global dollarization, technological financialization acts as the catalyst, and institutional financialization provides the fundamental guarantee for global dollarization. Dollarization, centered around U.S. interests, has serious consequences for peripheral countries. The peripheral countries can counter dollarization by promoting international monetary diversification, curbing technological financialization, and fully recognizing the risks associated with neoliberal reforms: liberalization, privatization, and marketization (LPM). China should prioritize the management of its financial strength and adopt high-quality economic development and Renminbi internationalization as core strategies to advance de-dollarization.

Keywords: Global financialization system, Dollarization, De-dollarization, Financial Theory of Political Economy, LPM Mechanism.


“It’s best to think about the dollarization in terms of two distinct but related processes. The first is the mounting contradictions of the dollar system itself. The second is the increasing availability of alternatives. The proliferation of these alternatives is not systematic it has a certain ad hoc character and it will retain this character until a sizable number of countries are able to come up with a plan for alternative unified international monetary arrangements. This is necessary because the ad hoc arrangements being made today are not systematic or complete solutions. So a systematic solution is necessary and this will only come into being when a sufficiently large number of countries representing a sufficiently large part of the world economy can mutually agree to create one. Another important option to U.S. financial dominance is to create a strong financial sector at home that is not relent on foreign capital. Such a financial sector must be oriented towards productive investment including investment in those sectors which have the greatest possibility for being competitive on export markets. Not only will expanding productive capacity increase the possibilities of international cooperation among countries that are increasingly dealing with one another on a more and more equal basis because the spread of multipolarity will reduce the power differentials among countries, it will also make all sorts of financial cooperation possible.”


The global political economy has long been characterized by the commanding presence of the US dollar—a linchpin that has steadfastly upheld US hegemony across decades. The dollar’s ascendancy, transcending mere economic value, has become emblematic of US strategic influence in both the economic and geopolitical landscapes. However, as we witness the dawn of a new era marked by a multipolar global order, there is growing speculation about the potential waning of the dollar’s omnipotence. This article is anchored around the following pivotal inquiries: In what ways is the burgeoning multipolarity in the global political economy reshaping perceptions and realities of the US dollar’s dominance? How might a diminished dollar centrality impact the broader edifice of US hegemony and the equilibrium of the global economic order? Which rising powers are at the forefront of this tectonic shift, and what strategic levers are they employing to influence the trajectory? Using the method of Geopolitical Analysis Grid, this study endeavors to illuminate the multifaceted interconnections between a multipolar world and the potential reconfiguration of the dollar’s global standing. With this in mind, it also aims to elucidate the strategic implications for the US and chart the evolving dynamics that will define the future global economic landscape. The findings suggest that China emerges as the principal contender to US hegemony, spearheading initiatives aimed at de-dollarization. However, these endeavors seem more intent-driven rather than readily identifiable and deterministic outcomes, with the prevailing trajectory being towards asset diversification in a “post-hegemonic” context. Evident manifestations of such inclinations are China's policies on RMB internationalization, exemplified by the introduction of the CIPS, UnionPay, and the Digital Yuan. These strategies complement the growing prevalence of bilateral trade in alternative currencies, a growing intention to conduct oil trading in non-dollar currencies, currency swap agreements, and the prospective advent of a BRICS currency. Institutionally, this shift is anchored in frameworks such as the New Development Bank, the SCO, the AIIB, and the BRI. The mounting view of dollar dominance as a manipulative instrument of US foreign policy, coupled with the perceived waning of US hegemony and diminishing confidence in the US dollar, impels developing nations to hasten their currency diversification pursuits. This momentum is observed particularly within the framework of South-South cooperation, with China's proactive stance being a pivotal influence.

Keywords: de-dollarization, dollar dominance, geopolitical analysis grid, multipolarization, US hegemony


“Paradoxical as it may seem, the world economic order behaves (as a rule) only as net exporters of capital. When we look at the ratio of external debt to GDP, we see that in the developed countries, the core of the world economic system, this ratio is expressed in three-digit percentages. In developing countries, on the other hand, the ratio of external debt to GDP is expressed in double digits. This is based on the following de facto situation: an unbalanced exchange of value between the countries that form the core of the world economy and the countries that are the periphery of this economy.”


After the financial crisis in 2008, developed Western countries entered a protracted period of stagnation. The economies of the over-financialized Western countries had difficulty compensating for the damages caused by this financialization. During and after the crisis, countries that emphasized production, such as China, overcame the crisis by growing and strengthening. The international institutions of the West have worked hard to compensate for the damage caused by the international financial system established at the behest of the United States. However, priority was given to the US and Western countries. In the post-2008 period, the US dollar and the financial system dominated by it suffered a major loss of confidence. Some organizations started to work as an alternative to this system. Organizations such as the SCO (Shanghai Cooperation Organization) and BRICS, composed of members of independent developing countries, have taken a series of concrete steps and created the basis for a new financial system. The aim of the new financial system is to minimize dollarization, establish alternative international financial institutions, and eliminate the financial hegemony of the US. There are four main components for the breakdown of US financial dominance: the utilization of national currencies in bilateral and multilateral trade agreements, the establishment of new international investment banks, the establishment of national credit card systems on the consumption side, and the widespread usage of currencies alternative to dollar and gold in central bank reserves. The subject of this article are the steps taken by the BRICS in the processes of the decline of the US financial hegemony and the establishment of the new financial system, the importance of SWAP agreements in bilateral and multilateral trade relations, and the course of the financial groundwork established by China and Russia starting from the mid-2010s. All these topics represent the cornerstones of the New Financial System.

Keywords: BRICS, digitalization, dollarization, 5R, New Financial System.