The dollar’s position in global finance is not under immediate threat, but the terms on which
organisations access dollar infrastructure are changing. This report examines where that change is
occurring, where it is not, and what four distinct monetary futures would mean for the organisations
operating within them.
De-dollarisation, as it is actually occurring, is a divergence between functions that previously
moved together. Payment routes are diversifying; reserve managers are adjusting at the margin;
RMB corridors and local currency settlement have become practical instruments in specific
contexts. But dollar liabilities, safe assets, collateral markets, and crisis liquidity remain deeply
concentrated. The dollar is not being displaced. The conditions under which it is accessed are
becoming more uneven and, for some actors, more contingent.
This report examines each of the dollar’s core functions in turn, identifies where fragmentation is
advancing and where it is not, and sets out four scenarios for how the divergence between them
develops. The scenarios range from continued dollar dominance under rising access costs to a
bifurcated system in which the dollar’s role differs substantially depending on the geography and
nature of the transaction.
WHAT THIS REPORT COVERS
The five functions of the dollar — liquidity and safe assets, balance-sheet dollarisation,
pricing and invoicing, infrastructure and jurisdiction, and political-security alignment —
and the different institutional conditions each would require to replace.
Why fragmentation is advancing faster in payment and routing functions than in reserve,
collateral, and crisis-liquidity functions, and what that asymmetry implies.
The role of sanctions, asset freezes, and the Russian reserves episode in changing how
central banks and sovereign institutions assess dollar concentration risk.
Four scenarios for how the divergence between dollar functions develops, with distinct
implications for financial institutions, corporate treasury, and sovereign actors.
Indicators to track across reserve allocation, payment infrastructure, pricing conventions,
and political alignment as each scenario develops.
