The Digital Transformation of International Financial Security
摘要
Finance has long been a subject of security efforts. As financial transactions become increasingly digitalized, financial institutions and infrastructures play a crucial role in shaping security regimes by controlling financial flows, enforcing sanctions, and monitoring global transactions. This chapter explores the evolving landscape of financial security in the context of digital transformation, emphasizing the role of financial infrastructures in both enabling connectivity and facilitating surveillance. The discussion begins by examining financial connectivity, focusing on correspondent banking and the SWIFT network as central infrastructures in international finance. Correspondent banks enable cross-border transactions but also serve as strategic tools in economic governance and sanctions enforcement. The SWIFT network, often viewed as a communication system rather than a payment processor, has played a key role in international financial surveillance, particularly in geopolitical conflicts. The exclusion of countries like Iran from SWIFT demonstrates the significant economic and political consequences of financial disconnection. The chapter then transitions to financial surveillance, highlighting how financial transactions generate data that can be leveraged by banks, intelligence agencies, and law enforcement to track (illicit) financial activities. The rise of digital platforms has further enhanced surveillance capabilities by embedding financial transactions within data-driven business models. Finally, the chapter examines emerging alternatives to Western-dominated financial infrastructures. Such alternatives, which are already present with the Chinese CIPS system, are continuing to emerge with digital finance. The rise of digital currencies, including central bank digital currencies (CBDCs) and so-called stable coins, also poses potential shifts in global financial governance. While digital currencies promise greater financial inclusion and efficiency, they also raise concerns regarding privacy and surveillance. The future of digital finance is currently shaped by the tension between financial fragmentation and efforts toward new forms of international cooperation.