Global Currency Hegemony: Lessons of the Pound Sterling for the US Dollar

Introduction. This article provides a comparative analysis of two eras of global monetary hegemony: the British pound sterling in the 19th and 20th centuries and the US dollar in the 20th and 21st centuries. The dollar's current dominance faces new challenges, such as digitalization, sanctions policy, and the growth of Asian economies, making historical analysis particularly relevant. This article identifies common patterns and differences in the internationalization of the two currencies and assesses the dollar's prospects through the lens of Britain's experience of losing its hegemony. Particular attention is paid to the process of internationalization of each currency and its connection with the industrial and economic status of the issuing country, the dynamics of key quantitative indicators (current account balance, trade balance, industrial output, public debt, etc.), the factors that served as prerequisites and causes for the weakening of national currencies, and the prospects for the dollar system.

Materials and methods. A combination of scientific research techniques and methods was used in writing this paper: methods of analysis, synthesis, and analogy; methods of systemic and structural functional analysis; methods of systematization and generalization; comparative analysis; and literature review. The methodological basis of the study is represented by specialized methods: historical, comparative economic, statistical, and others.

Research results. It has been established that the dollar and the pound sterling are characterized by similar negative manifestations of hegemony: chronic current account deficit, deindustrialization of the issuing country, appreciation of the real exchange rate, and a steady increase in public debt. However, despite this, the dollar possesses clear advantages, including financial market depth, the lack of a suitable alternative, and network integration into technologies (stablecoins).

Discussion and conclusion. The study shows that a rapid resurgence of the dollar's fate, similar to that of the pound sterling, is unlikely due to systemic inertia and the lack of an equivalent competitor. The main threat to the dollar system lies not in geopolitics, but in the erosion of trust in US fiscal discipline. Unlike the UK, which has chosen protectionism and devaluation, the US can only maintain its leadership through internal transformation and a balanced industrial policy. Reserve currency status does not eliminate the need for a strong manufacturing base.

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