For years, the digital asset industry insisted that crypto would separate money from the state. This week brought another reminder that the opposite may be happening. Money is not escaping geopolitics. It is becoming one of its most important battlegrounds.
A fascinating study from Cambridge University found that the strongest predictor of a country’s interest in central bank digital currencies is not financial inclusion, payment efficiency or technological modernisation. It is sanctions exposure. In other words, the countries most worried about Western financial power are the most likely to build new forms of digital money.
That finding helps explain why digital finance increasingly resembles a geopolitical arms race. From China to the Gulf, governments are building payment systems designed to reduce dependence on Western-controlled financial infrastructure. The latest example comes from the Islamic finance world, where proposals for Shariah-compliant stablecoins backed by gold, sukuk and tokenised Islamic assets are gaining traction. These projects are not simply financial products. They are attempts to create alternative monetary networks.
Meanwhile, Europe appears determined to take a different path. The European Central Bank this week rejected calls to relax rules for euro stablecoins, preferring tokenised bank deposits instead. The logic is understandable: policymakers fear that large-scale stablecoin adoption could drain deposits from traditional banks. Yet there is a strategic irony here. Europeans account for a substantial share of global stablecoin activity, but almost all of it is conducted in dollars. By making euro stablecoins harder to develop, Europe may be reinforcing the very dollar dominance it wishes to reduce.
If geopolitics was one theme of the week, banking infrastructure was the other.
A new Morgan Stanley report argued that the real disruption from digital assets will not come from speculation, but from plumbing. The bank estimates that as much as $82 billion of wholesale banking revenues could migrate to tokenised financial infrastructure by 2030. Cross-border payments, foreign exchange and collateral management are all being redesigned around programmable settlement rails.
HSBC is already acting accordingly. The bank has processed more than $3.5 billion of tokenised bond issuance through its Orion platform and is increasingly treating digital assets not as an experimental side project but as core financial infrastructure. The race is no longer to own the biggest balance sheet. It is to own the network on which money moves.
The clearest signal of where policymakers want this evolution to lead came from the Bank for International Settlements. Project Agorá, unveiled in greater detail this week, offers a vision of the future financial system in which payments, compliance and settlement are fused into a single programmable network. Every transaction can be pre-validated, liquidity can be locked in advance and regulatory checks become part of the infrastructure itself.
The crypto industry’s original dream was financial disintermediation. The reality taking shape looks rather different. The future is still digital, tokenised and programmable. But it is increasingly being designed by central banks, regulators and global financial institutions.
The battle is no longer over whether digital money will arrive. It is over who controls it.
