The Future of Dollar Hegemony in Light of the Rise of Central Banks’ Digital Currencies (CBDCs) and the Expansion of BRICS Settlement Mechanisms: Toward a Multipolar International Monetary System
DOI:
https://doi.org/10.31185/eduj.Vol63.Iss2.5158Keywords:
Dollar Hegemony , BRICS , Adaptive Monetary Hegemony, Monetary Multipolarity.Abstract
This study examines one of the most sensitive and consequential questions in contemporary international political economy: the extent to which U.S. dollar hegemony within the global monetary system can persist amid increasingly acute structural challenges. The research focuses on the interaction of three strategic variables: the rise of Central Bank Digital Currencies (CBDCs), the evolution of the BRICS strategy toward establishing an autonomous settlement architecture, and the gradual decline in the share of the U.S. dollar in global foreign exchange reserves.
The paper advances an innovative theoretical framework conceptualized as “Adaptive Monetary Hegemony.” This framework explains how dominant currencies maintain resilience and adjust to major structural transformations rather than experiencing abrupt systemic displacement. The model rests on four interrelated determinants: the institutional depth of the international monetary system, the high network switching costs embedded in global financial infrastructures, the technological adaptability of the hegemonic currency regime, and the long-accumulated norms of credibility and trust that underpin monetary leadership.
Drawing on a comparative historical analysis and an examination of official statistical data issued by the International Monetary Fund (IMF) and the Bank for International Settlements (BIS), the study concludes that dollar dominance is currently undergoing a phase of strategic repositioning rather than outright displacement. The most plausible configuration of the international monetary order in the medium term (2025–2030) is therefore an unstable bipolar monetary structure, in which the dollar retains a dominant—yet gradually declining—share, while regional currencies and central bank digital currencies gain prominence in specific settlement mechanisms.The study concludes with a set of strategic policy recommendations for Arab economies aimed at strengthening monetary sovereignty and enhancing economic resilience within an evolving and increasingly pluralistic international monetary environment.
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