Cheng, E., Lu, C. (2023). Research on the Mechanism of Dollarization and De-dollarization under the Global Financialization System . BRIQ Belt & Road Initiative Quarterly, 5(1), 6-29.
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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.