We study the feedback loop between dollar dominance, currency mismatch, and the U.S.’s role as a global dollar lender of last resort. Using new administrative data, we find that central bank swap lines act as substitutes for dollar reserves held by foreign central banks in helping fill global banks’ dollar funding gaps, particularly when market-based synthetic dollar funding is scarce. U.S. dollar lending of last resort, however, incentivizes global banks to engage in greater currency mismatches while encouraging foreign central banks to hold relatively fewer dollar reserves, exacerbating dollar funding gaps during crises. We develop a model that incorporates swap lines into a framework of global banking and central banking, highlighting the intermediation chain in emergency dollar liquidity provision. Swap lines stabilize dollar funding markets during crises yet lead to ex-ante over-dependence on the dollar due to pecuniary externalities between global banks and foreign central banks. This dependence introduces unintended long-term risks, not only for foreign countries but also, perhaps surprisingly, for the U.S., as it alters Treasury holder composition and the heterogeneous exposure to fire sale risks. Finally, we examine how post-crisis regulations have inadvertently amplified the demand for a global dollar lender of last resort, creating a policy ratchet effect that entrenches systemic reliance on U.S. dollar liquidity backstop.