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Beijing’s policymakers are recasting digital money as a tool of national power. A recent study in Study Times describes cryptocurrency and central bank digital currencies as part of a new architecture for “financial mobilization.” The paper claims that these systems allow liquidity to move even when sanctions take effect or commercial banks falter.
Within this framework, the blockchain is no longer a laboratory experiment. It becomes what the authors call a digital logistics front, a mechanism linking economic endurance with national defense.
According to the study, the shape of conflict itself is changing. Modern warfare, it is said, is holistic and hybrid, extending from battlefields into databases and trading screens. Digital currency is presented as a continuation of financial warfare by other means, faster, borderless, and programmable.
By converting state money into code, Beijing could keep its industries supplied and its citizens paid even if global markets splinter. The report describes a triad of “total war, hybrid war, and digital financial war,” in which currency serves as both a shield and a weapon.
China’s digital yuan and its ledger-based settlement systems are designed to operate outside Western rails such as SWIFT. They would, the authors argue, preserve payment channels if foreign sanctions were to widen. In that sense, the digital yuan doubles as an insurance policy against financial isolation.
For its part, the Party School views blockchain as infrastructure for national survival, rather than speculation. The study hints that future conflicts may be fought as much through liquidity management as through logistics.
The backdrop is a global reserve system already in flux. Economist Barry Eichengreen notes that the dollar’s share of world reserves slipped from 71 percent in 2000 to 58 percent by 2024. Governments, he says, are turning away from the dollar for political reasons even as companies cling to its liquidity.
China has seized on that moment through Project mBridge, a cross-border network linking CBDCs from China, Thailand, Saudi Arabia, and the UAE. Its purpose is clear: move money without touching SWIFT. For Beijing, speed is secondary; autonomy is the prize.
The report calls digital currency “a new form of traditional financial warfare.” It suggests that whoever builds and controls these digital rails could tilt global power itself. Yet, as Eichengreen cautions, geopolitics “cuts both ways.” A system designed to escape U.S. dominance might instead further fragment the financial world.
Outside state projects, the technology already straddles the line between commerce and conflict. Data from the TRM Labs 2025 Crypto Crime Report indicate that crypto transfers are linked to groups such as Hamas and Hezbollah. Among those sanctioned were GazaNow and its founder, Mustafa Ayash, accused of raising digital funds after the October 7, 2023, attacks, and a Syrian broker who routed Iranian proceeds through digital wallets.
Western regulators view such cases as proof that digital money can be weaponized from below. China, conversely, is embedding it in official policy from above. The divide captures two philosophies of control: one seeks to limit crypto’s reach, the other to master it.
That split raises an uneasy question: is digital currency becoming the front line of twenty-first-century power?
For Beijing, the answer seems implicit. Its hybrid approach, blending economic control with technological sovereignty, places blockchain at the core of national resilience. The next contest between major powers may not unfold in trenches or trading pits alone, but across the distributed ledgers linking them.
China’s integration of the digital yuan and blockchain warfare signals a shift in global power, merging finance with defense strategy. As nations compete for digital sovereignty, blockchain and CBDC systems are redefining how economic and geopolitical dominance will be secured in the twenty-first century.
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