Dollar Hegemony as International Law-making Power

Abstract The so-called weaponisation of the dollar as part of the escalating geopolitical competition has drawn attention to dollar hegemony within the fields of international law, international relations and political economy alike. This article contributes to discussions about the advantages conferred on the US due to the international role of the dollar and to emerging debates about international law and political economy by demonstrating that dollar hegemony operates as a form of international law-making power. The international role of the dollar gives the United States exceptional opportunities not enjoyed by other states to influence disproportionately crucial areas of international law, including the law of jurisdiction and the law of sovereign state immunity. This law-making power has been exercised in contradictory ways. On the one hand, the United States has used the privileged role of the dollar to formulate laws that materially benefited financial capital while also incorporating its logic and ideology. On the other, the United States has used the law-making powers of the dollar in order to pursue short-term particularistic, geopolitical and even partisan agendas. Otherwise put, the law-making functions of the dollar have reflected, without being able to resolve, the fundamental tensions that arise out of the use of a national currency as world money and, in legal terms, the contradictions that inhere in the fact that a globalized political economy remains mediated by domestic legal and political forms.