The resurgence of economic nationalism and protectionist trade policies since U.S. President Donald Trump’s return to the White House, particularly through the escalation and now de-escalation of tariffs against China and other key trade partners, has already triggered significant disruptions in global trade flows, with the potential for more in store. These measures, ostensibly aimed at correcting trade imbalances, led instead to retaliatory tariffs, volatility in global markets and a possible decline in cross-border investment. As supply chains fractured and industrial output slowed down, many economies faced the risk of recessionary pressures, revealing the fragility of global economic interdependence under political stress.
Amid these structural tensions, digital assets—most notably Central Bank Digital Currencies, or CBDCs, and stablecoins—have emerged as potential instruments of monetary and financial innovation that could help address some of the disruption caused by Trump’s tariffs and other systemic shocks to the global economy.
In this context, it is crucial to differentiate among the various digital financial instruments currently under consideration. CBDCs are digitally native, sovereign-issued representations of a nation’s fiat currency. Directly managed by central banks, they are designed to be legal tender, promising enhanced monetary sovereignty, greater financial inclusion and increased transaction transparency within a regulated framework. So far, three countries—Nigeria, the Bahamas and Jamaica—have launched CBDCs, while dozens of others, including China, Europe, India and Brazil, are in the process of piloting them.