Finance and multipolarization: currency as a geopolitical weapon

An analysis by André Lévy-Lang and Julien Pincet, published in Revue Banque and available here:
https://www.revue-banque.fr/economie/macro-economie/finance-et-multipolarisation-la-monnaie-comme-arme-ME26112691

Currency as a tool of power made explicit

For a long time, money was seen as a simple medium of exchange. Today, it has once again become what it has always been at certain moments in history: a tool of power.

In their analysis, the authors show how the US dollar, beyond its dominant role, has gradually become a lever of foreign policy and economic sanctions. This evolution is profoundly reshaping the balance of the global financial system.

A world that is not de-dollarising… but fragmenting

Contrary to the idea of a shift toward another dominant currency, the current system is evolving toward a more diffuse logic: fragmentation.

Across the world, alternative infrastructures are emerging:

• in Europe with SEPA and TARGET
• in China with CIPS
• in Brazil with Pix
• in India with UPI
• in Russia with domestic autonomous systems

These networks do not replace the dollar. They coexist with it, but make the global system more complex, more compartmentalised, and more heterogeneous.

The dollar remains central, but less “universal”

The figures are clear: the dollar still dominates international payments, foreign exchange markets, and global reserves.

However, its hegemony is becoming less fluid, less natural, and increasingly contested at the margins. The euro remains largely regional, while the yuan is gaining ground without yet becoming a fully global alternative.

The result is an unbalanced system, still organised around a central core.

The real risk: a more complex and fragile financial system

For the authors, the key issue is not the replacement of one currency by another, but the effects of fragmentation:

• reduced interoperability between payment systems
• divergence of regulatory frameworks across regions
• rising cyber and operational risks
• increasing complexity for financial actors

In other words: a less “globalised” world, but not necessarily a more stable one.

Authors at the heart of geofinance issues

André Lévy-Lang is President of the Institut Louis Bachelier and a leading figure in research on global financial system transformations.

Julien Pincet works on the links between finance and geopolitics within the Geofinance project at the Institut Louis Bachelier, focusing on new forms of monetary rivalry and financial infrastructures.

👉 Read the full article in Revue Banque:
https://www.revue-banque.fr/economie/macro-economie/finance-et-multipolarisation-la-monnaie-comme-arme-ME26112691

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