The following is a guest editorial courtesy of Simon Shear who writes about finance at Finalto, an innovative prime brokerage that provides bespoke fintech and liquidity solutions.

“There was no such thing as the Scientific Revolution, and this is a book about it.” Steven Shapin’s famous opening line is deliberately paradoxical, rejecting the idea of a single, coherent ‘revolution’ in order to examine the more complex and uneven transformation that did take place.

Journalist and historian Brendan Greeley strikes a comparable note in the Financial Times with his recent piece “There’s no such thing as the petrodollar”, trusting the reader to add ‘and this is a feature about it’.

As Greeley suggests, “the global dollar system was not set in motion by a single diplomatic coup — oil for dollars. It was invented quietly by private actors, then endorsed and protected by the US.”

More broadly, the history of the Eurodollar market is a tale of opportunistic private actors taking dollar deposits and thereby expanding dollar-denominated lending. Far from a coordinated top-down project, offshore dollar creation developed piecemeal, from the bottom up, before being embraced by American institutions.

Global currency markets might have looked very different. We can date US dollar dominance as far back as Bretton Woods, but it was at that very conference that Keynes floated the idea of Bancor, a global unit of account that could be used for international trade.

In this case, US political dominance was the critical factor, with Keynes’s idea being firmly opposed by the American negotiators, who were in an overwhelmingly dominant position[1].

If the Bretton Woods system formally ended in the 1970s, the broader dollar-centred order it helped to underpin has persisted for decades afterwards.

However, the global financial crisis of 2008 revealed the political and technocratic effort needed to hold the order in place, especially in times of extreme stress.

From a logic of inclusion to a logic of deals

If 2008 appeared, at the time, to mark a rupture, it now looks more like the beginning of a drift towards a less coherent and more unpredictable global economy. The clarity of hindsight, however, should make us cautious about the confidence of our present diagnoses.

In 2009, Zhou Xiaochuan, then governor of the People’s Bank of China, argued that the dollar’s reserve role was itself a source of instability, forcing surplus countries to recycle savings into US assets and amplifying global imbalances. His solution, the creation of an international currency unit, echoed Keynes’s earlier proposal.

Less than two decades later, the critique has flipped. In Michael Pettis’s account, it is China’s own economic model, particularly persistent underconsumption, that distorts global trade, with analysts such as Brad Setser arguing that the US should “strongly encourage” yuan appreciation. The contrast is not just a shift in perspective, but a reminder of how contingent real-time economic diagnoses can be, and how readily structural explanations are reassigned as circumstances change.

What might ‘strong encouragement’ look like? Biden White House tariffs on China marked a renewed willingness to intervene directly in trade flows. The Trump administration has pushed this further still, applying broader and steeper tariffs in an effort to level what is seen as a persistently uneven playing field. These measures sit alongside tightening restrictions on sensitive technologies, reinforcing a growing sense that China is, if not outright an adversary, then at the very least a strategic rival, a competing potential hegemon.

This stands in contrast to the 1980s, when the overriding anxiety was that Japan would eat America’s lunch. The response then was not to isolate Japan, but to discipline it as a partner operating within the same dollar-centred system. In a sense, the move was to integrate Japan even more deeply, rather than push it away. Japan’s apparently enthusiastic participation in the Plaza Accord is instructive. For Japanese policymakers, the adjustment of the yen was not simply a concession to US pressure, but a necessary adaptation to a shifting international environment, one that preserved Japan’s position within a system whose broader architecture it did not seek to challenge.

Or consider more recent parallels. In the wake of the global financial crisis, Federal Reserve swap lines extended to other central banks were crucial in maintaining global dollar liquidity, ensuring that the offshore dollar system continued to function under conditions of extreme stress. The move was characteristically technocratic and designed to shore up the prevailing economic order.

By contrast, US Treasury-led liquidity arrangements with Argentina and the UAE appear more explicitly geopolitical, reflecting decisions shaped more directly by the priorities of the executive.

Multilateral or multipolar?

If trade and monetary policy have never truly been apolitical, the shift towards more overt politicisation is itself consequential. If dollar swap lines come to depend on bilateral agreements (or “deals”) rather than operating as part of a more coherent, if imperfect, global system, the effect is to make that underlying structure both more visible and more contingent.

If it’s true, as Gita Gopinath suggests, that even “Europeans are trying quietly and gradually to decouple from US financial infrastructure,” then how much more so those outside the American umbrella?

De-dollarisation as a narrative, if not a market reality, is now a constant theme in global political economy. China has expressed a desire to make the renminbi a global reserve currency, and global banks are gradually adopting China’s Cross-Border Interbank Payment System, reducing reliance on USD clearing in international trade. Meanwhile, central banks have been acquiring gold both as a hedge against volatility and also, in some cases, as insurance against sanctions.

The dollar doesn’t seem likely to be dethroned any time soon. A more plausible outcome, however, is not displacement but fragmentation: a world of parallel systems, overlapping tools and competing financial architectures, in which access to liquidity and infrastructure is less uniform, and increasingly shaped by political alignment, with even more experimental alternatives, including crypto-based systems, at the margins.

Ultimately, then, perhaps there is no such thing as ‘de-dollarisation’, and this was an article about it. Greeley’s point was never that the offshore dollar system was unreal, only that its development was more improvised than the concept of a singular ‘petrodollar’ order suggests. The same may prove true of its apparent unravelling. There will be no single moment of monetary rupture because there was never a single system to dismantle.

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[1] Even here the story may not be a straightforward one of hegemony vs multilateralism. See Boughton, J. M. (2002). Why White, not Keynes? Inventing the postwar international monetary system (Working Paper No. 02/52). International Monetary Fund.