Payments, Politics and Power: Cross-border Systems in a Fragmented World

Cross-border payment systems are increasingly at the mercy of geopolitics and bilateral relations. Countries supporting a BRICS currency have been threatened with tariffs. Concurrently, the US pullback from global trade and the weakening of the dollar will increasingly sharpen debates on the efficiency of dollarization, the risks it poses to sovereignty, and whose interests the global financial system looks to serve. Facing such crossroads, policymakers, technologists, and finance leaders alike must maintain continuing and candid discussion with diverse stakeholders to stay ahead of the shifting landscape in cross-border payments, and share ideas and best practices in adapting to payments politics.
 
Part 1: How geopolitical risk, tariffs, and sanctions regimes are reshaping cross-border payments, and Asia’s payment corridors.
- To what extent are trade conflicts spilling over into cross-border payments systems and accelerating diversification into regional/local settlement systems?
- Will the push for regional/local architectures risk fragmenting global liquidity pools, diverging standards on payments rails, and cementing a geopolitical overlay on payment routing choices?
- Will greater complexity and compliance costs squeeze out smaller payment service providers, and even smaller markets?
 
Part 2: How governments, markets, and technologists might monitor and adapt to rising geopolitical uncertainty.
- What steps can governments in Asia take today to de-risk remittance flows?
- To what extent can regional organizations promote local-currency settlement, improve liquidity management, and support sanctions screening?
- From political signals, to multi-rail routing, to shifts in liquidity and FX pooling, how might payments service providers monitor and future-proof themselves against geopolitical risks?
- How might public–private collaboration help diversify payments infrastructures, while maintaining interoperability and retaining network effects?

Pre-reads:
- https://milkeninstitute.org/finance/geo-economics-climate-resilience-and-ai
- https://gftn.co/insights/cross-border-payments-the-past-the-present-and-the-future-we-envision
- https://gftn.co/insights/unchaining-the-stack-europes-discourse-around-digital-sovereignty-and-strategic-optionality