The geoeconomics of wholesale central bank digital currencies: great power rivalry

Wholesale central bank digital currencies (wCBDCs) are digital forms of central bank money designed for high-value transactions among financial institutions and corporations. The main jurisdictions have moved along this ‘road’ to wCBDCs at different start-times and at different speeds: China has been a first mover, also setting up a mini-lateral arrangement; the European Union (EU) has been a second mover, mostly focusing on the intra-EU dimension so far; and the United States (US) has been a late mover and quite reluctant to travel along the path. What explains this variation? This paper argues that geoeconomic dynamics, especially the quest for autonomy concerning critical financial infrastructures and currency statecraft, are central to understanding the uneven development of wCBDCs. Empirical evidence is drawn from public documents, media coverage, and 20 elite interviews across jurisdictions. The paper contributes to the literature on the weaponisation of finance and international currency rivalry, demonstrating that wCBDCs are utilised to mitigate vulnerabilities and expand monetary influence.