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US Dollar Dominance in Trade Invoicing and Cross-Border Investments in SEACEN Economies

Author

Listed:
  • The SEACEN Centre
  • Hiroyuki Ito

Abstract

This collaborative research study focuses on the causes and challenges of the wide use of the U.S. dollar in trade invoicing and cross-border investments. It finds that the U.S. dollar maintains its structural dominance in the international monetary system due to deep liquidity and powerful network effects, providing global stability while imposing high costs—such as the original sin borrowing—on emerging economies. The study highlights that although inertia in trade invoicing and global value chain integration support the prevailing use of the U.S. dollar in the region, policy considerations may include lowering transaction costs and strengthening the institutional foundations for reducing the excessive U.S. dollar dependence. This research publication covers the following seven SEACEN economies: Cambodia, Chinese Taipei, Vietnam, Malaysia, Thailand, Korea, and the Philippines (in the order of appearance).

Suggested Citation

  • The SEACEN Centre & Hiroyuki Ito, 2026. "US Dollar Dominance in Trade Invoicing and Cross-Border Investments in SEACEN Economies," Research Studies, South East Asian Central Banks (SEACEN) Research and Training Centre, number rp113, December.
    • Handle: RePEc:sea:rstudy:rp113
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    File URL: https://www.seacen.org/publication-doc/RP1-USD-Dominance-COMPILED-28Apr26.pdf
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