In her fascinating new book, Paper Soldiers, Saleha Mohsin traces the arc of the dollar’s rise to global preeminence. She provides a detailed historical account of the transition from the gold standard to the present regime of floating exchange rates, and writes about how past predictions of the dollar’s demise as the global reserve currency have not materialized. But she argues eloquently that the increasing weaponization of the dollar will likely motivate America’s adversaries to seek an alternate trading currency.

Countries around the world, whether they are America’s friends or foes, constantly complain about the dollar’s gyrations. The value of the dollar—its strength or weakness—has economic implications for people everywhere. A weak dollar relative to other foreign currencies makes American-made goods cheaper in the global market, which hurts foreign competitors whose products might be priced out of the marketplace. That dynamic can influence levels of employment in countries. U.S. Federal Reserve interest-rate policy often causes headaches for nations as well. When interest rates rise in the U.S., investors move capital from elsewhere to the U.S. because they can earn higher returns here. That capital flight sometimes has a destabilizing impact on national economies.

Clearly, the dollar’s status as the global reserve currency is a privilege that comes with some important responsibilities for the U.S. Maintaining a stable dollar is one. Although such preferences are seldom openly stated, some previous American administrations have favored a strong dollar, while others have preferred a weak one depending on policy priorities. Also, to guard against those destabilizing capital flows, U.S. fiscal and monetary policies have to be carefully coordinated so that U.S. interest rates don’t fluctuate from one extreme to another.

These legitimate concerns aside, what really irks America’s adversaries like Russia, Iran, and China is the sanctions regime that the U.S. uses to punish bad behavior. Following the Russian invasion of Ukraine in February 2022, nearly $300 billion of Russia’s foreign reserves were frozen by the U.S. and its allied G7 countries that held those assets. They remain frozen, and lately there has been some chatter about using those assets to help Ukraine defend itself. And recently, America has issued threats of secondary sanctions that are making it more difficult for Russia to evade the trade restrictions imposed on it after the invasion. Iran, Venezuela, and other countries that have rocky relationships with America have endured these curbs for years. Unsurprisingly, these adversaries are determined to fight back.

In my secondary school days in Ghana, we had student leaders who were referred to as school prefects. They supervised students and helped maintain order in dormitories, dining halls, and other areas on campus. In consultation with teachers, headmasters appointed prefects based on character, academic ability, and other personal qualities. Prefects were students like everyone else, but by virtue of the status conferred on them, they wielded considerable power.

America, in many ways, is acting like a global prefect. The adversaries are annoyed by that because they think no one expressly appointed the U.S. to act in that capacity. In a world where nations cannot agree on what constitutes good character, that selection seems to have been made by investors.

Financiers are generally not in the business of making moral judgments. They care mainly about where they can get the best returns on their assets, and more importantly, where those assets are best protected. Rule of law, democratic form of governance, political stability (although that is a bit questionable these days), a deep and liquid financial market, among others, make America quite an attractive place for people everywhere to invest their assets. Trust is the most precious thing in the world of finance. Investors are extremely hesitant to deploy their assets in markets with autocratic forms of governance, where there is always the risk of losing everything with the stroke of one person’s pen.

Chinese President Xi Jinping is learning that lesson the hard way. Lately, leaders of foreign companies that have operated in China for years appear to have grown tired of an environment in which business rules seem to change on a whim. Capital has flown out of China in the last couple of years, and is one of the reasons for the country’s current economic wobbles. President Xi recently invited American business leaders to a conference in Beijing to reassure them that China remains open for business. It is unclear whether he can completely repair the damage that has been done.

Russia, Iran, China, Brazil, South Africa, and other countries friendly to them, have formed a rebellious gang of students who are uninterested in recognizing the prefect’s authority. At the BRICS Summit in South Africa last year, some leaders of the bloc proposed a BRICS currency for trade and investment among its members. Nothing much has happened since then, but it would be a fascinating process to watch.

The BRICS currency idea reminds me of the Tower of Babel. According to that Biblical story, the entire human race used to speak one language, which made communication easy. The population decided at one point to build a tower so grand that its top would reach the heavens. God saw the project as a display of arrogance, and promptly introduced multiple languages into the mix. Suddenly unable to communicate among themselves, the people were forced to abandon the project, after which God dispersed them all over the face of the earth. Thus came into being peoples of different nationalities speaking different languages.

BRICS members are geographically dispersed, speak vastly different languages, and are so culturally different that it is quite difficult to see how such a currency could be created. In stark contrast, eurozone countries are tightly clustered together in a contiguous territory. Though they speak different languages, their cultural similarities made it much easier to form a currency union. Furthermore, they had operated within a common market framework for decades before introducing the euro. Even then, it has not been smooth sailing. Some EU leaders have said repeatedly that a monetary union cannot be sustained without a fiscal union, but the idea of a pan-European fiscal authority is anathema to Germany and other major EU countries.

There is no such history of close economic interactions among BRICS countries. Starting such a currency project from scratch would therefore require a lot of goodwill. But the only thing that seems to unite these countries is their dislike of the prefect. Relations between China and India, the two behemoths of BRICS, are so frosty that Xi Jinping couldn’t even muster the appetite to attend the G20 Summit in New Delhi last year.

The Lord’s wrath is not what will sow the confusion in this case. There is enough turmoil within the group already to easily doom this project. The first brick for this BRICS tower may not even be laid because of in-fighting.