Author
Prof David Collins
Organisation/Institution
City St George's, University of London
Country
UNITED KINGDOM
Panel
Banking and Finance
Title
The Shanghai Consensus: De-Dollarization and the New Development Bank
Abstract
There has been discussion of late in the West regarding the decline of the US dollar as the world’s reserve currency, to be replaced variously by China’s renminbi, crypto-currencies, or the anticipated BRICS currency. One contributing factor to de-dollarization is the rise new structures in development bank lending, shifting away from the US-dominated World Bank. This paper will consider the role of the Shanghai-based New Development Bank (NDB) also known as the BRICS Bank, in creating space for alternative currencies. One of the NDB’s most significant contributions to de-dollarization lies in its active promotion of local currency financing. Unlike traditional multilateral development banks like the World Bank that predominantly lend in dollars, the NDB actively encourages loans denominated in local currencies. This policy helps borrowing countries avoid accumulating dollar-denominated debt and reduces their exposure to exchange rate fluctuations, particularly during periods of dollar strength. By adding new members beyond the original BRICS countries, the bank is also creating a broader network for non-dollar financial flows. This expansion increases the potential for cross-border transactions and development finance without using the dollar as an intermediary currency. This paper will argue that the NDB’s impact on global de-dollarization remains constrained by its relatively small size compared to established institutions like the World Bank. The bank still operates within a global financial system where many key functions – from trade settlement to reserve holdings – remain predominantly dollar-based. The NDB’s most significant contribution to de-dollarization may therefore be in demonstrating the viability of alternative approaches to development finance. Its impact should be understood as part of a longer-term evolution in the international financial architecture towards diversification of currencies rather than a dramatic short-term shift away from the dollar.
Biography
Professor David Collins specializes in the law of the World Trade Organization and international investment law. He heads City Law School’s Digital Trade Research Group and is currently co-editing Routledge's Handbook on International Economic Law. A former prosecutor for the Attorney General of Ontario, he is a Solicitor of England & Wales and is a member of the Ontario and New York bars. David is Co-Editor in Chief of the journal International Trade Law and Regulation and Series Editor for Routledge's Insights on International Economic Law. He has been a visiting academic at many institutions including Columbia, Berkeley, the Institute of International Economic Law at Georgetown, the World Trade Institute in Bern and the Max Planck Institute in Heidelberg. His research has attracted funding from the British Academy, the ESRC, the EPSRC and the Society of Legal Scholars. He serves on the Academic Advisory Councils of Politeia and the Institute of Economic Affairs and is a Fellow of the Adam Smith Institute, a Senior Fellow of the Macdonald Laurier Institute as well as an Academic Advisor for the Commonwealth Scholarship Commission. David was nominated to the roster of panellists for NAFTA (now USMCA)'s trade remedies disputes by the government of Canada and to the panel of arbitrators for EU free trade agreements by the European Commission. He has given evidence to the UK parliament's International Trade Select Committee on many occasions and was appointed as an Independent Member of the UK Trade Remedies Authority's Audit and Risk Assurance Committee.
