The Currency We Forfeited

Three Septembers ago, before mBridge had cleared its first sixty billion dollars and before the President of the United States had signed an order forbidding the federal government from so much as studying a sovereign digital dollar, I wrote that the political convulsions then crossing the African continent looked, to my eye, like the opening of a window. The regime changes in Niger and in Gabon, the cracking of old French commercial arrangements, the visible exhaustion of the developmental promises that the West had been making for two generations without keeping; all of it, taken together, struck me as the conditions under which something new could be built. I argued in that 2023 piece that "it is my opinion that these shifts create a tremendous opportunity to allow the emergence of digital currencies as a disruptive force," and I noted what I still believe to be the truer indictment, that "our generalized western conception of the needs and wants of countries in Africa has crashed violently against the reality that our American conception of 'democracy' on its face is incredibly hypocritical and disconnected from the reality." That window has not closed. Other people have walked through it.

The proof of concept is no longer hypothetical. mBridge, the Multiple CBDC Bridge, is now a five-central-bank settlement platform jointly developed by the People's Bank of China, the Hong Kong Monetary Authority, the Bank of Thailand, the Central Bank of the United Arab Emirates, and the Saudi Central Bank, which graduated from observer to full participant in June of 2024. As of the most recent reliable accounting, the platform has cleared roughly sixty-nine billion dollars in cross-border settlement value, and the e-CNY accounts for over ninety-five percent of that volume. More than thirty other central banks watch from the observer benches; among them sit the South African Reserve Bank, the Central Bank of Egypt, the Bank of Mauritius, and the Bank of Namibia. None of those four are full participants. They are watching, taking notes, learning the wiring of a system whose operational rails are being laid by Beijing. In October of 2024, the Bank for International Settlements, which had midwifed the project for four years, formally withdrew, with its general manager Agustín Carstens explaining in a Madrid speech that the platform had "graduated" and could now be carried by its members on their own. Whatever one wishes to make of that exit, the technical question has been answered: the infrastructure works, the value moves, the books reconcile. What is in dispute is who builds the next one, and what it will be backed by, and what it will mean for the global ordering of money.

On the twenty-third of January, 2025, the President of the United States signed Executive Order 14178, titled "Strengthening American Leadership in Digital Financial Technology." Its Section 5(a) is, in plain English, a withdrawal from the field: it prohibits federal agencies "from undertaking any action to establish, issue, or promote CBDCs within the jurisdiction of the United States or abroad," and it revokes, in the same document, the prior Biden executive order on digital assets. The order's policy framing goes further, asserting an intention to prohibit not just the establishment but the circulation and use of such instruments domestically. One can argue, and I will: the privately issued dollar stablecoin is a different and in many ways consistent American choice, and the trillions now settling on it should not be dismissed. But anchoring private dollar liquidity is not the same thing as being the institutional partner that helps a sovereign system in the global south stand up its own rails. We have, deliberately and on the record, declined that role.

The country that has not declined it is China. And here is the place where the honest conservative reader must hold two truths at once. The Chinese model, executed through mBridge and the e-CNY and the older infrastructure of the Belt and Road, is in its own way extractive; the ninety-five-percent share of settlement volume the digital yuan now carries through that platform is not the description of a partnership of equals, it is the description of a hub-and-spoke. China is not better than we were. China is simply present, and we are not. The instinct to dismiss mBridge as a junior project that will collapse under sanctions pressure is the same complacency that told us, year after year, that SWIFT and the dollar clearing system were unkillable as instruments of American leverage rather than of American restraint. The patient construction of an alternative is what the next decade will be.

Now to the part that the diagnostic requires us to name. The African continent holds the physical inputs of the rest of the world's twenty-first century. The Democratic Republic of the Congo controls roughly half of the world's identified cobalt reserves and produces something closer to three-quarters of the global supply that the battery industry depends upon. South Africa holds, on the most recent United States Geological Survey accounting, in the neighborhood of eighty-three percent of the world's platinum-group metal reserves, the metals on which catalytic converters and certain classes of semiconductor and clean-energy manufacturing turn. Guinea sits on roughly a quarter of the world's bauxite reserves, the front end of every aluminum smelter on the planet. Namibia is the second-largest holder of identified uranium reserves on earth, with Niger sitting in the top tier alongside it. Libya leads the continent in proved oil reserves, with Nigeria second and Algeria third; Nigeria leads in proved natural gas, with Algeria close behind. Zimbabwe and Mali now carry the audited lithium reserves that the energy transition cannot proceed without, and the DRC, beyond its cobalt, sits on copper reserves placing it in the top five globally. These are not promises. They are bookings, in the public ledgers of agencies we ourselves run.

A digital currency tokenized against an audited, basket-weighted portfolio of those reserves, settled on rails the participating governments themselves operate, would, by any honest definition of soundness, be a harder currency than a fiat instrument backed by the full faith and credit of a sovereign that carries thirty-six trillion dollars in obligations and that has spent the better part of two decades teaching the rest of the world to fear the weaponization of its clearing system. That is the headline claim of this piece, and I will defend it: the money that could be built beneath the African continent could rival or exceed the dollar in soundness. Not, yet, in liquidity. Not, yet, in network effects. But in the property that sits at the philosophical center of what makes money trustworthy, which is convertibility into something the world cannot wish into being. The materials are there. The proof of concept is there. The political will, in scattered places, is there. What is not there, and what we have actively chosen will not be there, is an American partner who is interested in helping build it. We have offered to be the sheriff. We have not offered to be the teacher.

This is the place where the historical pattern must be spoken of without flinching. The sovereigns that have, in living memory, attempted to displace the dollar in the pricing of commodities or in the settlement of cross-border trade have not enjoyed peaceful outcomes. Muammar Gaddafi, in his year as chair of the African Union, championed the project of a single African currency, and the most widely circulated account of his subsequent fate, the April 2011 memorandum from Sidney Blumenthal to Hillary Clinton released by WikiLeaks as document C05779612, reports that Gaddafi's government held 143 tons of gold and a comparable quantity of silver, that these reserves "were intended to be used to establish a pan-African currency based on the Libyan golden Dinar," and that French intelligence regarded the project as one of President Nicolas Sarkozy's motivations for the intervention. That memorandum was compiled through former intelligence channels and was treated skeptically by some State Department staff; readers should weight it as intelligence hearsay rather than as confirmed French policy. The undisputed facts, however, are that Gaddafi advanced the continental-currency idea publicly, that he was killed during a NATO-backed intervention in 2011, and that the Libyan state remains, fifteen years later, a fragmented and contested space. Saddam Hussein priced Iraqi crude in euros from November of 2000 until the American occupation reversed the decision in the summer of 2003. The Islamic Republic of Iran was cut from the SWIFT messaging system in March of 2012, restored briefly under the Joint Comprehensive Plan of Action in January of 2016, and cut again in November of 2018; Qasem Soleimani was killed by an American drone strike at Baghdad International Airport on the third of January, 2020. The Maduro government of Venezuela launched the Petro on the twentieth of February, 2018, and President Trump signed an executive order forbidding American transaction in it twenty-seven days later; the instrument was eventually wound up in January of 2024, defeated as much by its own incompetence as by Washington, but the message was not lost on anyone who was watching. The pattern is not subtle. It is also not a reason for the African continent to stand still. It is a reason to build away from the line of sight of the apparatus that has historically enforced the dollar's monopoly, which is precisely what is now happening, and it is part of the explanation for the running room China has been given.

The conservative reading of this reckoning is the one I am closing on. The United States lost the role of partner because it would not surrender the role of cop. China is content to be the partner because the partner role is the role that compounds. The African continent, which has both the physical resources and now, finally, the technical demonstration that a sovereign settlement system is achievable, will choose what it chooses, and it does not need our permission. I do not need to propose a comeback plan, because any honest plan would require an institutional candor about the limits of American power that the present Washington consensus is incapable of producing. My job here is to name what has been forfeited. We had the chance to be technical assistance, regulatory mentor, market opener, the conduit that helped a friend build something the friend, not the donor, would ultimately own. We chose, instead, to remain the entity that the rest of the world is now constructing sovereign systems in order to bypass. That choice has consequences. The consequences are arriving on the books of a settlement platform that does not need our permission, denominated in a currency that does not bear our face, collateralized against minerals that are not in our ground.

The meter is running.