Cryptocurrencies as Tools of Geopolitical Competition: Increasing the Anarchy of the International System

Stojanović, Bogdan (2024) Cryptocurrencies as Tools of Geopolitical Competition: Increasing the Anarchy of the International System. The Review of International Affairs, 75 (1191). pp. 241-260. ISSN 0486-6096

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Abstract

This research intends to provide a deeper insight into the potential of cryptocurrencies as a tool in geopolitical competition. Based on blockchain technology, cryptocurrencies could reshape the international economy and politics in a decentralised manner, challenging centralised money control, transforming trade relations, and offering alternative pathways for international financial transactions. The author employs the theoretical perspective of structural realism, which acknowledges the existence of anarchy in international relations in the absence of a central global authority, to support the main hypothesis that cryptocurrencies have the potential to exacerbate this anarchy. As these digital assets gain prominence, their impact on global trade and financial systems will likely further enhance the decentralised and anarchical characteristics of the international system. Nation-states will seek to control cryptocurrencies through legislative restrictions, regulation, and, most importantly, by creating their own central bank digital currencies (CBDCs). The analysis showed that such processes are already taking place, but states will ultimately fail to minimise the role of cryptocurrencies in geopolitical competition. Some countries have successfully avoided international pressures and sanctions through cryptocurrencies, and secret money flows open up new challenges such as money laundering, war financing, and terrorist and subversive activities.

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