New report outlines how new money and payment systems could end dollar’s stranglehold on Global South

London, 11 December - New forms of money and payment systems, including central bank digital currencies (CBDCs), could enable Global South nations to build a new financial architecture that doesn’t leave them weighed down by the dollar, according to a new report from think tank Positive Money.

The report argues that the way the international monetary and financial system (IMFS) is designed, with the dollar reigning supreme, leaves Global South countries with little choice but to exploit their natural resources to obtain dollars for trade and debt repayments, and forces them to prioritise those repayments over spending on public services and adaptation to climate change, which they are disproportionately vulnerable to.   

The report recommends the development of new payment systems to enable greater South-to-South trade in local currencies. With new cross-border payment systems emerging, and new forms of money like CBDCs still in their infancy, the authors argue that there is an opportunity to design these systems in a way that builds a fairer and more sustainable global economy. 

Positive Money’s report explores how many Global South countries are already actively trying to shift away from the dollar to trade with their own currencies. New forms of money and payments could accelerate this trend and help them reclaim their economic policy space to tackle their urgent development and climate change priorities. 

The report comes amid growing tensions over the dollar-centric global system, with calls for an alternative international payment system to de-dollarise the world economy featuring prominently at the BRICS Summit in October.

The US’ own president-elect, Donald Trump, has himself expressed a desire to devalue the dollar, believing a weaker exchange rate will make US exports more competitive. But he has also been clear he wants the dollar to remain dominant in the world economy, threatening BRICS countries with 100% tariffs if they replace the dollar.

Danisha Kazi, co-author of the report and Head of Economics at Positive Money, said:

“At the heart of an unjust global economy is a strict hierarchy of currencies - with the dollar at the top - which keeps Global South nations financially dependent on Global North countries, and forces them to exploit their natural resources in order to obtain expensive dollars for trade.

“New forms of money, such as CBDCs, and emerging payment systems that sidestep the dollar could give the Global South more independence over their own economic policymaking.”

Notes:

• Read Positive Money’s report, Beyond Dollar Dominance: New money and payment systems for a multipolar world: https://positivemoney.org/beyond-dollar-dominance  

• Positive Money will be launching the report with an online event featuring experts including a former minister and central banker: https://www.eventbrite.co.uk/e/beyond-the-dollar-tickets-1082960286369 

• President-elect Trump recently threatened countries seeking to replace the dollar with 100% tariffs: https://x.com/realDonaldTrump/status/1863009545858998512