The Battle for Global Monetary Infrastructure Has Begun | Francesco Lapenta posted on the topic | LinkedIn
The Battle for the Infrastructure of Money has Begun. Today, the European Central Bank switches on a new system for banks, and almost nobody will notice. It is much much more than it appears to be. It is called Pontes. It allows firms to settle tokenised assets, such as bonds, using central-bank money. Ordinary people will never touch it, but it is part of a much bigger game. Think of money as traffic. For a long time, the central question was who printed it. Increasingly, the question is who owns the roads: who can see a payment, freeze it, redirect it, or prevent it from arriving. Three different answers are now taking shape. The United States is bringing companies that issue digital dollars, known as stablecoins, inside American law, including sanctions and anti-money-laundering rules. Private firms can carry the dollar into markets banks struggle to reach, while American rules travel with it. Dollar power may become less bank-centred without becoming any less American. Europe faces a simple problem. If the world’s digital money is overwhelmingly denominated in dollars, Europe risks building its future monetary system on infrastructure governed elsewhere. Around 99% of stablecoins are dollar-denominated, while euro versions remain tiny. Pontes is part of Europe’s answer for markets, while the digital euro is being developed for the public. Both are defensive moves. China is building a second road. Its digital yuan, CIPS network and cross-border CBDC experiments do not replace the dollar. They create another route for countries that do not want to, or cannot, move money through the dollar system. Around 95% of transaction volume on mBridge has reportedly been in e-CNY. This is strategic optionality, not dominance. Bitcoin remains the symbol of escaping all of this, but it lacks the legal finality, elastic credit and compliance architecture on which institutional payments depend. That keeps it largely outside this contest. In the middle sit banks, payment firms, stablecoin issuers and clearing institutions. They are increasingly becoming geopolitical gatekeepers, determining who gets through, who gets watched and which rules apply. The world is therefore not heading towards one digital money. It is heading towards rival monetary infrastructures, each embedding different rules and jurisdictions into the movement of value. The real contest is not simply over which currency people hold, but over whose infrastructure they must use to move it. The geopolitical consequence is that monetary power is beginning to separate from currency dominance. The dollar can remain the world’s leading currency while the infrastructure around it becomes less exclusive, as Europe builds sovereign settlement capacity and China creates alternative routes for sensitive trade. Digital money is becoming a struggle over strategic autonomy, sanctions power and global economic sovereignty. I am preparing a report to explain in detail the long-term consequences. | 18 comments on LinkedIn
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