Global Versus Secure Payments Systems?

Financial Market Infrastructure in the Era of Sanctions and Weaponized Interdependence

Abstract

The study overviews the past development of correspondent banking systems and their politicization since the 1990s. It examines the alternatives and potential substitutions, discussing the conventional Chinese clearing system, local currency settlement frameworks, central bank digital currency experiments, and blockchain currencies. The author argues that the initiative factor in this development is the weaponization of the incumbent global payment system by Western states and the subsequent global securitization drive. Nonetheless, the alternative payment options either cannot fully substitute the existing system or they can equally controlled by the governments.