The Phenomenon of the Dollar Paradox and Its Role in the Transformation of the Modern Global Monetary-Financial System

Abstract

Currently, fundamental transformations are occurring within the global monetary-financial system. Contrary to the prevalent belief in the decline of the dollar, this article seeks to demonstrate that the American currency exhibits adaptive properties, which solidify its position in the international financial system, albeit possibly at a lower level. The experiences of other countries in promoting their national currencies in the international exchange, trade, and investment systems indicate that all such attempts yield varying degrees of success. Regarding the life cycle of foreign currencies, they initially establish themselves rapidly, increasing their share in operations, but then quickly encounter a natural limit and retract within their respective countries. Conclusion dwells upon the fact that the dollar primarily serves as the currency of developing countries, as they predominantly accumulate it. However, the sheer number of these states renders the probability of diversifying risks through potential alliances in the monetary-financial sphere against the dollar practically negligible, with rare exceptions such as the BRICS countries.