The Dollar Is “Sticky” for a Reason: How Banking Infrastructure Built U.S. Monetary Power—and Why Today’s De-Dollarisation Debate Is Really About Systems, Not Slogans
The Dollar Is “Sticky” for a Reason: How Banking Infrastructure Built U.S. Monetary Power—and Why Today’s De-Dollarisation Debate Is Really About Systems, Not Slogans
Author: Zion Zhao Real Estate | 88844623 | 狮家社小赵
Author's note: Written based on an Asian Insider interview featuring Dr. Mary Bridges, Ernest May Fellow in History & Policy at Harvard University’s Belfer Center, and author of Dollars and Dominion: US Bankers and the Making of a Superpower. The Straits Times+1
TL;DR: Why the Dollar Is “Sticky”—and Why the Real Contest Is Over Infrastructure, Not Catchphrases
The U.S. dollar’s global dominance is often discussed as if it were a simple policy choice—something Washington can switch on or off. The core argument of my essay is that this framing is wrong. Dollar power was not inevitable, nor is it maintained by slogans. It was built—as a layered financial infrastructure “stack” composed of institutions, branch networks, operating standards, trusted intermediaries, and durable relationships that made dollar transactions workable across borders at scale.
Historically, the United States did not rise to monetary primacy merely because Britain declined. In the early 1900s, U.S. banks expanded overseas by borrowing heavily from British banking practice—sometimes literally copying procedures, staffing models, and documentation standards. This “scaffolding” mattered because global finance is operational: credit and settlement require trained people, shared protocols, reliable paperwork systems (the “technology” of the era), and trusted local relationships. Asia was not a footnote to this story. Early U.S. banking activity was deeply entangled with Asian trade corridors and treaty-port commerce, aligning with U.S. ambitions to expand commercial access.
This infrastructure perspective explains why the dollar remains “sticky” today. The dollar is reinforced by (1) the depth and liquidity of U.S. Treasury markets as global collateral, (2) the dollar’s role as the dominant vehicle currency in foreign exchange, and (3) institutional trust—legal enforceability, credible governance, and predictable rule-setting. These features create powerful network effects: once pricing, hedging, settlement, and risk management are standardized around the dollar, switching costs become enormous.
Against this backdrop, “de-dollarisation” is best understood as partial diversification rather than an imminent replacement. Many countries are exploring non-dollar trade settlement, building alternative payment rails, increasing gold allocations, and adjusting reserve compositions. Yet capability does not automatically translate into global adoption. Payment systems and reserve assets work at scale only when they are embedded in trusted institutions, interoperable networks, and dispute-resolution frameworks. That is why transitions tend to be slow: infrastructure is difficult to replicate quickly, and credibility takes years to build.
A major strategic theme is that monetary power and infrastructure statecraft are linked. Large-scale infrastructure initiatives—especially China’s Belt and Road—are not only construction programs; they generate long-term supply chains, maintenance dependencies, financing relationships, and political leverage. Over time, those relationships can shape borrowing patterns and settlement preferences, even if the dollar remains central.
A modern paradox worth highlighting: stablecoins can strengthen the dollar’s footprint even as they disrupt traditional intermediaries. Many stablecoins are anchored to the dollar and backed by dollar assets, which can increase demand for U.S. safe assets while shifting influence from regulated banks toward new actors (issuers, custodians, exchanges, on-chain liquidity venues). This is less “USD vs. another currency” and more “USD on bank rails vs. USD on token rails.”
Finally, policy volatility—tariffs, sanctions, and politicized messaging—matters because money is ultimately a trust relationship. The more uncertain the perceived governance of the system, the stronger the incentive to build redundancy.
Bottom line: the world is likely moving toward a more multi-rail, multi-currency architecture. That does not require the dollar to disappear; it implies a gradual evolution beyond a single dominant system—where the decisive competition is over infrastructure, credibility, and interoperability, not rhetoric.
Introduction: A Reserve Currency Is Not a Crown—It’s a Construction Site
The modern conversation about the U.S. dollar often collapses into a single word—dominance—as if the dollar were a light switch that Washington can flick on and off. What struck me in Asian Insider’s discussion with historian Dr. Mary Bridges is how effectively she dismantles that myth.
Her argument, grounded in early-twentieth-century archival work and synthesized in Dollars and Dominion, is deceptively simple: dollar power did not “arrive.” It was assembled—through branch offices, staffing choices, paperwork standards, local relationships, and the slow construction of trust on the ground. h-net.org+1
That perspective is more than historical color. It is a practical lens for today’s anxieties—de-dollarisation, alternative payment rails, rising gold purchases, renminbi settlement, sanctions risk, tariffs, stablecoins, and CBDCs. If Bridges is right, then the question is not “Which currency replaces the dollar?” but:
Which infrastructure stack becomes credible enough to carry global trade, savings, and settlement at scale?
1) Dollar Dominance as a “Stack”: Institutions, People, Paper, and Protocols
Bridges’ core contribution is to reframe the rise of the dollar as the rise of a banking infrastructure—a scaffolding that made dollar transactions feasible outside U.S. borders. Barnes & Noble+1
1.1 The overlooked middle layer: private banks as geopolitical plumbing
In the early 1900s, the United States was watching Britain with envy. Sterling’s reach reflected not only London’s markets, but also a global lattice of bank branches, merchant relationships, and standardized operating practices. In Bridges’ telling, U.S. bankers did not invent an alternative system—they initially copied the British one and hired British-trained personnel to run it. h-net.org+1
The now-famous anecdote from the interview—American hires being trained in British penmanship so ledger entries could be read across offices—sounds quaint until you realize what it represents: operational standardization as power. In a world before digital rails, the “technology” was the human system.
1.2 Asia was not peripheral—it was foundational
A second point that deserves emphasis: American overseas banking was not merely a Caribbean or Atlantic story. Bridges highlights how early U.S. banking activity was strongly Asia-oriented—particularly in China’s treaty ports—intersecting with U.S. strategic ambitions around trade access. h-net.org+1
That dovetails with the historical record of the United States pressing for commercial access via the Open Door policy at the turn of the century. Office of the Historian
Fact-check note: Their discussion of China treaty ports and early U.S. banking expansion is consistent with both Bridges’ published work and broader diplomatic history of U.S. trade strategy in that period. h-net.org+1
1.3 After World War I: the scaffolding was already in place
By the time U.S. financial capacity surged after World War I, the key enabling point is that there was already a functioning overseas apparatus—people, offices, routines, and relationships—through which dollar credit and trade finance could be deployed. This is the heart of Bridges’ “not inevitable” claim: macroeconomic weight matters, but macro weight without micro infrastructure cannot scale. h-net.org+1
2) Why the Dollar Remains “Sticky”: Network Effects Meet Deep Markets
If dollar dominance was built as infrastructure, it persists as infrastructure. And infrastructure is hard to replace because it is path-dependent, capital-intensive, and socially embedded.
A useful way to break down “stickiness” is into three reinforcing layers:
2.1 Market layer: depth, safety, and the Treasury benchmark
The U.S. Treasury market functions as the world’s most important pool of high-quality collateral and benchmark pricing, supporting liquidity management and risk-free discounting across global finance. Even investors who dislike U.S. politics often still need dollar collateral because so many systems are built around it.
2.2 Transaction layer: a vehicle currency in FX markets
In foreign exchange, the dollar remains the world’s principal vehicle currency. The BIS 2025 Triennial Survey reports the dollar was on one side of 89.2% of all FX trades in April 2025 (up from 88.4% in 2022). Bank for International Settlements
This matters because FX is the oxygen of cross-border commerce. When the dollar is the default intermediary, it becomes “cheaper” in operational terms—pricing conventions, hedging markets, liquidity pools, and dealer balance sheets all reinforce its centrality.
Singapore relevance: the same BIS release shows Singapore’s share of global FX trading rose to 11.8% (from 9% in 2022), underscoring how global currency plumbing increasingly runs through Asian financial hubs even when the unit of account remains the dollar. Bank for International Settlements
2.3 Institutional layer: trust, law, and enforcement capacity
Bridges’ interview repeatedly returns to trust—not as sentiment, but as the foundation of credit. Money is a claim; credit is confidence that the claim will be honored; and confidence rests on institutional reliability. That is why “de-dollarisation” is often less about economics in the short run and more about perceived governance stability over decades.
3) De-Dollarisation: What Is Actually Changing—and What Is Not
During the interview, they mentioned the familiar indicators that I have written extensively on before: non-USD commodity settlement, falling foreign Treasury ownership, more yuan/rupee settlement, reserve diversification, central bank gold buying, and alternatives to SWIFT.
The correct analytical move is to separate headline narratives from measurable system migration.
3.1 Reserve diversification is real, but the “replacement” thesis is overstated
Central banks have discussed diversification for years, and the trend is often framed as “the dollar is falling.” The more precise claim is:
Dollar share has gradually declined from earlier peaks, but remains the largest reserve currency by a wide margin (as reflected in IMF COFER reporting and central bank disclosures). data.imf.org+1
A declining share does not automatically imply imminent displacement. In portfolio terms, a system can remain dominant while becoming less monopolistic.
3.2 Alternatives to SWIFT and new settlement rails: capability vs adoption
China’s Cross-Border Interbank Payment System (CIPS) is often described as a SWIFT alternative. The facts show meaningful growth:
CIPS reports 190 direct and 1,567 indirect participants (as of December 23, 2025). cips.com.cn
It also reports “Annual Business Volume (2024): 175 Trillion” (RMB, per its own site). cips.com.cn
China’s central bank reports CIPS processed about RMB 42.84 trillion in Q4 2024. People's Bank of China
Interpretation (careful): This is evidence of scale, but scale alone does not equal global dominance. Global payment systems depend on interoperability, correspondent networks, legal enforceability across jurisdictions, sanctions risk management, and—critically—trusted dispute resolution. That is the institutional layer Bridges insists we cannot ignore.
3.3 Gold buying: a diversification signal, not a new monetary anchor
Central banks have increased gold purchases in recent years, widely interpreted as hedging against sanctions risk and fiat-currency uncertainty. The World Gold Council documents elevated central-bank demand and the role of official sector purchases in recent years’ gold market dynamics.
Gold is not replacing the dollar as transactional infrastructure, but it is increasingly used as a politically neutral reserve asset—a meaningful shift in risk management even if it does not alter day-to-day settlement.
3.4 Treasury ownership: directionally contested, but not a clean exit
Foreign holdings of Treasuries have fluctuated, shaped by exchange rates, yield differentials, domestic reserve policies, and geopolitical considerations. U.S. Treasury TIC data and Congressional analysis track these changes and generally support the point that composition and growth rates have shifted over time—without implying that the Treasury market has lost its central role.
Fact-check note: Their claim that foreign ownership is “going down” is better phrased as “foreign participation is evolving and uneven,” varying by country and cycle. The broader implication—heightened diversification incentives—is credible; the linear trend claim is too blunt.
4) Infrastructure Statecraft: Why Belt and Road Belongs in a Currency Conversation
One of the most valuable analytical moves in the interview is the connection between currency power and construction power—ports, rail, energy corridors, data cables, logistics ecosystems.
4.1 The Belt and Road Initiative is not a project list; it is a relationship machine
The World Bank’s work on Belt and Road transport corridors shows how infrastructure can reduce trade costs and reshape connectivity—creating long-run dependencies and opportunities. World Bank+1
Independent tracking suggests cumulative BRI-related engagement has reached very large magnitudes since 2013, with year-to-year composition shifting between construction contracts and investment. blogs.griffith.edu.au+1
The strategic point Bridges makes is not “BRI equals RMB dominance.” It is more structural:
Whoever builds the port often influences the contractors.
Contractors shape procurement and supply chains.
Supply chains create financial relationships.
Financial relationships shape settlement preferences and borrowing choices.
That is exactly the “stack” logic—only now applied to China’s outbound footprint.
4.2 The debt service phase changes the politics of influence
Recent reporting highlights that many developing countries are now repaying more to China than they receive in new loans, reflecting a transition from the lending boom to a restructuring/refinancing era. Reuters
This matters because influence dynamics differ between:
the “build” phase (visibility, goodwill, rapid capacity expansion), and
the “repay/restructure” phase (bargaining, conditionality, domestic political backlash).
5) Stablecoins: The Most Important “Dollar Competition” That Still Reinforces the Dollar
If you want a truly counterintuitive insight from the interview, it is this: the most disruptive monetary technology of this cycle may strengthen the dollar even as it weakens traditional dollar gatekeepers.
5.1 The stablecoin paradox, in numbers
A 2025 New York Fed Liberty Street Economics analysis reports:
stablecoin market capitalization around $232 billion as of March 2025 (up ~45x from 2019), and
concentration: Tether and USDC ~86% of the market. Liberty Street Economics
Crucially, major stablecoins are typically backed (to varying degrees) by traditional financial assets, including U.S. Treasury securities—meaning growth can increase demand for dollar safe assets even when transactions occur on crypto rails. Liberty Street Economics
5.2 Why regulators care: new rails, new intermediaries, new risk surfaces
Stablecoins route around the classic correspondent-bank model. That does not automatically “kill” the dollar; it can instead move dollar usage to a different plumbing layer, redistributing power from regulated banks toward token issuers, custodians, exchanges, and on-chain liquidity venues.
Singapore is directly relevant here because it has pursued a framework aimed at making certain stablecoins credible as payment instruments through reserve backing and redemption standards. MAS’ stablecoin framework materials outline expectations around reserve assets and redemption timelines for stablecoins regulated in Singapore. Monetary Authority of Singapore+1
Implication: The future may look less like “USD vs RMB” and more like “USD on bank rails vs USD on token rails”—with the contest shifting to governance, supervision, and interoperability.
6) Tariffs, Sanctions, and the Politics of Trust: When Policy Volatility Becomes a Monetary Variable
The interview touches on a politically sensitive but analytically essential issue: policy credibility.
A reserve currency’s strength rests on expectations that rules are stable, enforcement is predictable, and institutions are resilient. When major powers weaponize trade policy, threaten tariff escalation, or expand financial coercion, they can unintentionally incentivize diversification—even if the dollar remains dominant in the near term.
This is where Bridges’ historian’s caution becomes a practical warning: infrastructures do not change overnight, but once actors begin building alternatives—new payment rails, new reserve portfolios, new settlement norms—the transition can become self-reinforcing over time.
7) Singapore’s Strategic Window: A Hub for the Next Monetary Stack
Although Singapore is not a central case study in Bridges’ book, the interview’s logic points to why Singapore is structurally well-positioned in a shifting system:
Global FX centrality is rising. Singapore’s share of global FX turnover reached 11.8% in April 2025, per BIS—placing it among the top global FX centers. Bank for International Settlements
Regulatory credibility is a competitive asset. In a world where new rails (stablecoins, tokenized deposits, cross-border CBDC experiments) compete on trust, Singapore’s rule-setting can be as important as any single technology. Monetary Authority of Singapore+1
Geopolitical neutrality (relative) matters. As fragmentation rises, firms and investors prize jurisdictions that can interface cleanly with multiple systems without forcing binary alignment.
In short: if the future is multi-rail, multi-currency, and multi-jurisdictional, Singapore’s opportunity is to be the place where those rails can be supervised, reconciled, and safely connected.
Conclusion: The Post-Dominance Era Is Not “After the Dollar”—It Is “Beyond a Single System”
The most disciplined takeaway from Bridges’ argument is not a prediction about the dollar collapsing or the renminbi ascending. It is methodological:
Currency power is built by infrastructure.
Infrastructure is sticky.
Transitions are slow—until they aren’t.
The decisive contest is rarely about the symbol (USD/CNY); it is about the stack (rails, law, liquidity, trust, institutions, and interoperability).
Today’s “de-dollarisation” headlines are therefore best understood as early signs of a system experimenting with redundancy—building optionality in case the existing infrastructure becomes too politicized, too fragmented, or too costly to rely upon as a single point of failure.
The dollar can remain first among equals while the world becomes more plural. That is not a contradiction. It is what monetary evolution looks like when the underlying plumbing starts to fork.
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References (APA)
Anadu, K., Azar, P. D., Cipriani, M., Eisenbach, T. M., Huang, C., Landoni, M., La Spada, G., Macchiavelli, M., & Malfroy-Camine, A., & Wang, J. C. (2025, April 23). Stablecoins and crypto shocks: An update. Federal Reserve Bank of New York, Liberty Street Economics. Liberty Street Economics
Bank for International Settlements. (2025). OTC foreign exchange turnover in April 2025 (Triennial Central Bank Survey statistical release). Bank for International Settlements
Bridges, M. (2024). Dollars and dominion: US bankers and the making of a superpower. Princeton University Press. Barnes & Noble+1
Cross-Border Interbank Payment System. (2025). CIPS worldwide participants; annual business volume (2024). cips.com.cn
International Monetary Fund. (n.d.). Currency Composition of Official Foreign Exchange Reserves (COFER) database. data.imf.org+1
Monetary Authority of Singapore. (2023). MAS finalises stablecoin regulatory framework (infographic and related materials). Monetary Authority of Singapore+1
Office of the Historian, U.S. Department of State. (1899–1900). The Open Door notes. Office of the Historian
People’s Bank of China. (2024). Payment system operations (CIPS), Q4 2024 (reported operational statistics). People's Bank of China
Reuters. (2025, October 10). Developing nations rack up net debt payments to China… study finds (reporting on Boston University GDP Center findings). Reuters
The Straits Times. (2025, December). Asian Insider: “Why the US dollar is so sticky” (episode featuring Dr. Mary Bridges). The Straits Times
World Bank. (2019). Belt and Road economics: Opportunities and risks of transport corridors (Main report). World Bank+1
World Gold Council. (n.d.). Central bank gold purchasing and official sector demand commentary.
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