Sovereign power over money and finance infrastructure is becoming an increasingly relevant concern for nations around the world as rapid technological and financial innovation and geopolitical turmoil upend their previous paradigms. In particular, fiat currencies are at risk as new forms of money and payment systems enabled by distributed ledger technology begin to undermine them.
The role of money in a nation’s sovereignty is integral, as a fragmented system (such as a fiat-based economy being undermined by widespread use of stablecoins) is a system that cannot bind its national economy together. And for any jurisdiction outside the United States, as most popular stablecoins are linked to the US dollar, this fragmentation raises a particularly pertinent question of monetary sovereignty. CIGI Senior Fellow Timothy Lane examines this question and how the spread of digital assets is changing the global money landscape, outlining steps to maintain monetary sovereignty for countries concerned with how stablecoins, central bank digital currencies and more could affect the integrity of their economic structures.
