Multipolarity: The US is Now A Risk to Be Hedged
Multipolarity will have a big impact on financial technology
This is my daily post. I write daily but send my newsletter to your email only on Sundays. Go HERE to see my past newsletters.
The Munich Security Conference may not be at the top of the fintech agenda, but it should be, as its report points to a multipolar world in which the US is perceived “as a risk to be hedged against.”
This profoundly impacts much of our fintech world, particularly payments and CBDC, where the proverbial rubber of geopolitics meets the road.
While talk of BRICS currencies and dedollarization may provide stark examples of a multipolar world made possible by fintech, a far more subtle example shows how to hedge US risk.
The best example is the development of the digital euro, in which the ECB clearly states that it wants to develop a payment system independent of the US’s Visa and Mastercard.
This is a fine example of why multipolarity isn’t a topic for policy wonks, nor is it the domain of rogue countries like North Korea and Iran.
It is a real consideration when building the financial infrastructure of the future, as it will require unprecedented degrees of flexibility and openness.
👉TAKEAWAYS
🔹 Although it is unclear whether we are already living in a truly multipolar system, today’s world is characterized by “multipolarization.”
🔹 While the world today displays elements of uni-, bi-, multi-, or even nonpolarity, it is clearly being shaped by a changing global distribution of power, with a larger number of actors having the ability to influence key global issues. But the world is also experiencing increasing polarization, both at the international level and within many countries’ domestic politics.
🔹 For many politicians and citizens around the globe, a more multipolar world holds significant promise. But increasing competition among the various “poles” and their order models is already impeding joint approaches to global crises and threats.
🔹 As few states still pursue foreign policies focused on the common good – and domestic divides are further complicating such attempts – it is far from clear how a process of depolarization that could set multipolarity on a positive track could be initiated.
🔹 For multipolar optimists, a world where several powers keep each other in check and there are more actors able to constrain Washington should be a more peaceful and stable one. Many of these optimists do not perceive Washington as “an anchor of stability, but rather a risk to be hedged against.”
If you know someone who would like this newsletter, please share it with them and help grow our Asia, CBDC, and AI aficionados community!
Readers like you make my work possible! Please buy me a coffee or consider a paid subscription to support my work.
Sponsor Cashless and reach a targeted audience of over 55,000 fintech and CBDC aficionados who would love to know more about what you do!
