Imperialism is necessary for a transnational currency to flourish, like how the dollar is used for global trade and especially for oil trade. Fiat national currency only really needs the government of a particular polity to have a monopoly on violence, and this creates a stable internal market for currency as well as an exchange market for buying other national currencies.

is imperialism a necessary precondition for a fiat system to flourish?

Historically it seems so. Though we need to be careful when examining this, because there was a very particular course of events that led to the current world system of currency, and probably a very particular intent behind it.

In Marx’s time, the primary proponents of a fiat currency were the Americans. The US was competing with the English (and French, Dutch and Spanish to an extend) for control of the Americas, as well as colonial expanses in the Pacific and Asia. All these nations were considered to be major powers (i.e. imperialist empires), with extensive economic systems. The US was at a serious disadvantage against all others (except the Spanish who were a waning colonial empire in the process of collapsing):

• The Europeans had extensive and established economies of scale, fueled by cheap resources from their colonies and by cheap labour from both their colonies and their forced urbanization efforts in the past century, while the US was still in the process of transitioning from an agricultural and resource economy to an industrial economy. The US tried to fix this by creating its own cheap labour force through extensive campaigns to attract European immigrants (slogans like “land of the free”, “land of opportunity”, “the American dream”, etc were born in this era for this very purpose).

• The Europeans had extremely strong currencies owing to their industrialization. They were the primary sources of finished goods in most forms across the globe, and the primary recipients of raw materials from across the globe, making them the prime movers of trade. Coupled with their colonies, most trade occurred through their currencies. In addition, and in particular the English, they were the major lenders of all other minor powers. This meant they could not only easily control any inflationary tendencies of their currencies by giving out national loans and controlling trade and prices, they could also keep expanding their economies at rates and sizes the US could not hope to match. On the contrary, the US was able to produce comparable number of goods, but had no external markets to export them to. This meant that the US was plagued by constant crises of overproduction, wild cycles of inflation and deflation, and no means to recover besides lending from the very European powers they wanted to be rid of.

• The US started out with a representative currency (like was the trend at the time). For example, George Washington is known to have been particularly opposed to attempts to establish a fiat currency, because he understood that this would turn the farmers and labourers into debt slaves for a small subset of land-owners and industrialists. Not that he was abhorred by the morality of the idea, but he knew that this would doom any attempts to rapidly develop the country from a colonial nation into a self-sufficient major power. However, the US lacked the gold reserves to actually do this. They knew however that there were big gold deposits scattered all over the country (many in Indian territories) and made a concerted effort to send pioneers to such areas (like California and Colorado) to mine this gold and sell it to the government. The effort was a success, but the great influx of gold created a massive inflation that the US couldn’t really recover from until the early 1900s, when they banned free gold prospecting and heavily regulated the mining, selling and ownership of gold, as well as its use as a secondary form of transactional currency.

When WW1 happened the US managed, for the first time, to gain an economic advantage over its competitors, who were busy slaughtering each other in France and elsewhere. The US snuggled into the niche of primary exporter, as the Europeans were converting their industries into arms manufactories, and their labour forces into soldiers and then into fertilizer. Simultaneously, they started lending to the warring Europeans. There’s a whole slew of literature on how Woodrow Wilson, and others, were attempting to prolong the fighting in Europe in order to continue reaping the benefits.

Then after WW2, the US found itself the nation all its allies (and the defeated too) would rely upon to rebuild them. Everybody’s nation (and industry) was in ruins, vast portion of their population was dead or incapable of work, and their economies were in tatters. The US had a large and capable labour force, proven itself able to be the factory of the world, had a vast merchant fleet ready to carry goods across the globe, and was holding every other country in massive debt. A debt they quickly tried to grow by devising such schemes as the Marshall plan. This is when the first foundations were laid for a fiat currency.

As US dollars became more prominent in world trade, the English pound was falling rapidly. Eventually in the 1970s, the Americans were able to cut a deal with every other major nation in the world, to transition to a fiat currency. Nobody could object, because if the Americans decided to go ahead at it alone, they would all be in trouble due to their massive debts to the US, and their reliance on trade with the US. Soon everybody followed along, with very few exceptions.

But this is where things get complicated. Because immediately after this, the Americans established a deal with the Arab states (and through them with OPEC), that all oil sales from now on would occur in dollars. Meaning, if the French wanted to buy oil from the Arabs, they couldn’t do it with francs anymore. They’d have to exchange their francs for dollars, and then go to the Arabs to buy the oil with the dollars they got. Meaning, that the dollar fiat currency was no longer so much fiat. It was backed by the price of oil. Which the Arabs controlled through rate of production. For which the Americans paid with military and diplomatic protection of the Arab states. This is why the dollar became a reserve currency of the world. As the world needed to always have dollar reserves to buy the oil it needed, this meant it became convenient to conduct all trade of all other goods in dollars too. And what do you do with all these dollars you now have sitting in your vault? You could exchange them back for your own currency again (by paying fees to do so), but it would be more profitable to go into the US and use them to invest in US bonds, US stocks and US businesses (without paying any fees because you are already using dollars to do dollar things). Which solved the problem that Marx predicted: Inflation was no longer an internal problem for the infinite money printing in the US, because the dollar itself became a commodity to be exported.

In summary, yes you need to be a pretty strong imperialist force to establish a fiat currency. But we should recognize that the US doesn’t really have a fiat currency as such. Everyone else does, with all the problems it entails. But the US has a sort of a mixed commodity/representative currency. The dollar itself IS a commodity that is exchanged for other commodities worldwide. No other currency can claim that achievement. At the same time, it is backed by the world economy, as its price depends on the price of oil, which affects the price of everything else. Which is why the US is so intent on two things: Global dominance of trade and economic output, and oil.