WORKING PAPER

Paper by Simone Deos, Alex Wilhans Antonio Palludeto, and Pablo Augusto Tallini

International Development Economics Associates | IDEAs

This paper examines the enduring centrality of the U.S. dollar in the international monetary and financial system and the contradictions that increasingly destabilize its hegemony. Drawing on a critical international political economy perspective, it revisits debates on monetary hegemony and structural power, and reconstructs the historical trajectory of the dollar as a global currency, with particular attention to the tensions sharpened after the 2008 global financial crisis, the rise of China, and the growing weaponization of the dollar. The paper argues that, although the dollar system remains dominant, the post-2008 period has intensified processes of contestation and structural dislocation within the dollar-centered order. It then turns to Latin America and analyzes a differentiated set of monetary and financial initiatives — including development finance arrangements, regional liquidity mechanisms, and payment and settlement infrastructures. While these initiatives remain fragmented and do not amount to a systemic rupture, they nonetheless open spaces for a more plural institutional foundation in a multipolar world economy.

Full article: https://www.networkideas.org/wp-content/uploads/2026/05/Challenging-Monetary-Hegemony.pdf