The development of payment infrastructure in emerging-market economies (EMEs)—from instant payment systems in retail markets to wholesale central bank digital currencies (CBDCs) for cross-border interbank settlement—is part of a broader technological transformation. But the intense scrutiny these initiatives face from the United States suggests that what is at stake is not only technical supremacy, but monetary power itself.
Changes to how payments are executed imply a shift in control over the critical infrastructure through which money circulates, with consequences for the exercise of monetary sovereignty. While sovereignty in monetary affairs was traditionally understood as the authority to issue currency, it expanded over time to include oversight of banking systems and financial flows. In an increasingly digitalized world, however, sovereignty now hinges on the mechanisms underpinning payments and settlements, and the data generated by financial transactions.
This shift is especially visible in EMEs, where formal sovereignty has long coexisted with structural dependence. For years, the dollar’s dominance has rested not only on its status as a global currency, but also on a dense network of privately governed infrastructure—the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the New York Clearing House Interbank Payments System (CHIPS), and the Continuous Linked Settlement (CLS)—that shape how cross-border payments and financial settlements are conducted. Far from being neutral conduits, these US-dominated systems embed geopolitical power into the routine functioning of global finance, enabling “weaponized interdependence” through sanctions, exclusion, and control over financial flows.
Brazil’s Pix is a case in point. An instant payment platform created and managed by the Central Bank of Brazil, Pix has rapidly become a central pillar of the country’s financial architecture, surpassing payment cards in transaction volume. It embodies a governance model in which the state manages both payment rules and the data generated by transactions—an increasingly important source of economic and strategic power.
This has clearly spooked the US. The Office of the United States Trade Representative (USTR) opened an investigation into Brazil and included Pix in its 2026 National Trade Estimate Report on Foreign Trade Barriers under the broader category of “non-market policies and practices” that may generate “economic and national security risks” for the US. The report positions state-led payment infrastructure, data-localization measures, and digital regulations as potential distortions of competition that disadvantage foreign firms, particularly US financial-service providers.
But Brazil is not an isolated case. The USTR report expresses similar concerns about efforts in India, China, Indonesia, Turkey, Vietnam, Pakistan, Algeria, Oman, Kuwait, Qatar, and Thailand to develop domestic payment systems and strengthen regulatory control over digital and financial infrastructure, including through data-localization requirements.
This trend reflects a broader global shift toward a state-led approach to building financial infrastructure for the digital economy. Domestic payment systems, including Pix and India’s UPI, should therefore be understood as part of a wider movement among EMEs to reclaim control over the rails on which money and financial data move.
Such a structural shift becomes even more consequential at the cross-border level, unlocking the potential for connecting domestic instant payment systems (like the Bank for International Settlements-led Project Nexus) and, crucially, using CBDCs for wholesale transactions.
Projects such as mBridge—bringing together China, Hong Kong, Thailand, the United Arab Emirates, and Saudi Arabia with initial support from the BIS—as well as emerging BRICS+ initiatives, illustrate how CBDCs can be used to redesign international payment infrastructure. By integrating messaging, clearing, and settlement, a single, state-governed platform may reduce reliance on traditional intermediaries and enable direct settlement in local currencies.
More importantly, this approach embeds public authority into the technological architecture of payments and settlements, expressed in code, protocols, and governance rules. Monetary sovereignty, in this context, becomes infrastructural: it is exercised through the design and control of systems that support cross-border financial flows.
For EMEs, this represents a strategic opportunity. By reducing dependence on dollar-based infrastructure and enabling settlement in local currencies, multi-CBDC platforms and a standardized protocol linking domestic instant payment systems provide a pathway, albeit still limited, to expand the external dimension of monetary sovereignty.
To be sure, these developments do not signal the end of dollar dominance. The structural foundations of today’s US-led system, from deep and liquid domestic financial markets to strong network effects and global demand for dollar-denominated assets, are robust. The rapid expansion of dollar-backed stablecoins may even reinforce this dominance in the digital realm.
But a more fragmented and contested landscape is emerging. The new initiatives are reconfiguring the existing system at the margins: creating alternative channels, redistributing power (albeit to a limited degree), and, above all, demonstrating that infrastructure, not currency, is the primary terrain of monetary competition.
This evolution has two important implications. First, future conflicts in the international monetary system are likely to center on standards, platforms, and data governance rather than exchange rates or reserve currencies. Second, EMEs are no longer merely passive recipients of global financial standards; they are becoming drivers of institutional and technological innovation.
In this context, the central question is no longer who issues money, but who designs and governs the infrastructure through which it moves. The answer will not be determined by technological efficiency alone. It will be shaped by law, institutional choices, and geopolitical strategy—and will ultimately define the future distribution of monetary power. – Project Syndicate
Camila Villard Duran is Associate Professor of Law at ESSCA School of Management.
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