Money in a globalized world: From monopoly to oligopoly

When addressing issues of global finance, we are accustomed to thinking of money as effectively insular: each currency sovereign within the territorial frontiers of a single state or monetary union. In fact, cross-border currency competition has become increasingly prevalent. Money today is effectively deterritorialized. What does this mean for national monetary sovereignty? A strictly territorial currency privileges government in relation to societal actors. Conversely, the benefits of monetary sovereignty are noticeably compromised by currency deterritorialization, which gives the private sector a critical degree of leverage over public policy. So long as governments remain the main source of money, however, the state still retains a significant role. Monetary sovereignty has been not so much lost as transformed. Where once existed monopoly, we now find oligopoly—a finite number of autonomous suppliers, national governments, all vying ceaselessly to shape and manage demand. Globalized money, at its most basic, is a political contest for market loyalty.