The Geoeconomics of Regional Currency Contest: How Bilateral Swap Arrangements of India and Japan Counter the Rise of RMB

India and Japan are the only two non-dollar issuing countries that have signed dollar-denominated bilateral swap arrangements (BSAs) with foreign central banks. These arrangements indicate that India and Japan are committed to protect their BSA partners' financial security even at the expense of their own dollar reserves. What has motivated the two countries to make such policy choices? This article argues that India and Japan's dollar-denominated BSAs not only enhance financial security but also limit the recipients' motivations to look for alternative settlement currencies for trade or investment. Even if the BSAs are not directly aimed to contain China, therefore, this effectively limits the potential expansion of the RMB's influence and allows India and Japan to maintain their structural power by supporting regional dollar dominance. This article finds, therefore, that India and Japan's dollar-denominated BSAs serve as a tool in the geoeconomic competition with a rising China in support of the incumbent regional powers.