Sovereignty in a World of Dollars and Code

How money, code, and infrastructure create choke points that control nations’ economies

Credit: NASA (Unsplash)

Bitcoin and cryptocurrencies were born to offer freedom from government control—money that can’t be frozen, seized, or sanctioned. A financial system where code, not politics, makes the rules. A decentralized system that no one controls.

In the contest between financial sovereignty and American power, decentralization might be winning some battles, but it’s losing the war in unexpected ways. Every nation locked out of the dollar system is now building alternatives—digital yuan, BRICS payment networks, Bitcoin reserves, euro stablecoins.

But as they escape one set of choke points, are they walking straight into new ones?

The architecture of control hasn’t disappeared. It’s just moved—from central banks to mining pools, from SWIFT to stablecoin issuers, from correspondent banks to cloud service providers. And almost every layer of this “decentralized” infrastructure might lead back to the same place: American jurisdiction, American companies, American enforcement.

Perhaps true sovereignty was always an illusion. Perhaps every financial system—no matter how it’s designed—eventually becomes someone’s weapon.

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How the Dollar Became a Weapon

America built the dollar’s dominance through deliberate action—with support from its allies.

The architecture began at Bretton Woods in 1944, where the dollar was pegged to gold and every other currency pegged to the dollar. When that system became unsustainable, Nixon severed the gold link in 1971, transforming the dollar into pure fiat—backed by nothing but American economic might and military power.

Then came the masterstroke in 1974: the petrodollar system. By ensuring that Saudi Arabia—and through it, OPEC—would price oil exclusively in dollars, the US guaranteed permanent global demand for its currency. Every nation needed dollars not by choice but by necessity. Want to buy oil? You need dollars. Want to build foreign exchange reserves? Dollars are the deepest, most liquid market. Want to trade internationally? The correspondent banking system runs on dollars.

Barrels to Bytes

This system was designed, put to use, and later turned into a tool of coercion. Sanctions evolved in tandem with this dollar infrastructure. Early sanctions were blunt: trade embargos, asset freezes. Cuba, 1960. Iran, in waves since 1979. But as global finance digitized and centralized, sanctions became surgical. SWIFT, created in 1973 as a cooperative messaging system for banks, became the enforcement mechanism. When the US demanded Iranian banks be cut from SWIFT in 2012, the ‘neutral’ cooperative complied. When Russia invaded Ukraine, SWIFT disconnected Russian banks within days.

Banks didn’t need to be ordered to over-comply—the threat of being cut from dollar clearing was enough. Lose access to US correspondent banks, and you’re effectively exiled from global finance. So banks freeze accounts preemptively, exit entire markets, implement compliance regimes that go far beyond legal requirements. Fear is the enforcement mechanism.

The global financial infrastructure, exemplified by the experiences of Cuba, Iran, Venezuela, and Russia, and potentially others, is fundamentally American infrastructure with international reach.

When a growing number of nations are cut off—and more are threatened daily—from this system, it raises a critical question: is it genuinely neutral and for all to use, or is it simply an instrument of hegemony? We live in a world when no one is out of reach from sanctions. Imagine if Visa and MasterCard were switched off.

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The Unintended (but Predictable) Consequence

Dollar weaponization was meant to enforce compliance. Its unintended consequence is forcing entire nations to build alternatives—sometimes successfully. Countries locked out of traditional finance are turning to building new rails and using new assets as a lifeline, often in the form of blockchain and cryptocurrencies, often with widely different approaches and consequences.

Venezuela’s USDT economy emerged as millions of citizens, crushed by hyperinflation, fled the bolivar for Tether’s dollar-pegged stablecoin. Binance operated freely in the country, and USDT became the de facto currency of daily life—remittances, savings, commerce. For ordinary Venezuelans, it was liberation from monetary chaos.

Venezuela: The Accidental Stablecoin Empire

Until it wasn’t. In 2024, Tether froze 32 wallets associated with the Venezuelan government at the request of US authorities, later expanding to 41 wallets. Tether’s CEO was unambiguous: the company works with American law enforcement and complies with sanctions. The Venezuelan people could use USDT, but their government could not. The rails they thought were anonymous were, in fact, fully supervised.