While the deal may not be a typical national security case (albeit semiconductors underpinning defence technologies and chips at the centre of the US-China trade war), the UK government’s decision could also signal a major shift in industrial policy – where tech moves from being seen as the leading edge of private sector innovation to becoming a core part of industrial policy. Is Tech the new oil or the new defence? In his report, Paul Domjan says it will be ironic, but not at all surprising, if the Tech War that began with the Trump administration accusing Huawei of being a vehicle for Chinese state policy leaves all tech globally, to a lessor or greater degree, as a vehicle for state policy. On the one hand, we have the military-industrial complex, where the state plays a substantial role in shaping the activities of private companies. On the other hand, the oil and gas industry shows what tech might look like in a more fluid, less extreme tech war. Get the full story →

The Chinese government launched the Digital Currency Electronic Payment (DCEP) project, aimed at digitising circulated cash and to assimilate payment methods from local tech giants, including Alibaba-backed Ant Group and Tencent. The project allows the public to save their digitised bills and coins in a separated state-designed app. Contrary to popular belief, the DCEP will not harm large e-payment companies like Alipay and WeChat Pay, according to analysts at EqualOcean. They look at why the Alibaba-Tencent duopoly in the Chinese e-payment market is not likely to be shaken by the brand-new state project. Get the full story →

In our 2021 global themes we said that this year we would begin to find out the real shape of central bank digital currencies (CBDCs)... so it is proving. But CBDCs will more evolutionary then revolutionary. Unlike cryptocurrencies, which are designed around a permissionless and transparent architecture, the issuing central bank will be able to design in terms of use and limitations. Nevertheless, if they offer a genuine token of value, CBDCs could easily solve the problems that have driven many people in the emerging markets to adopt cryptocurrencies. Get the full story →

Recent weeks have seen a build-up of Russian military forces on Ukraine’s borders and in illegally occupied Crimea, with not only an escalation of tensions and rhetoric, but also an increase in fighting and fatalities, on both sides. Russia’s actions are seen as intimidatory, not a harbinger of military conflict. But we cannot discount the threat of military action, even if an invasion is seen as unlikely. In our latest report, we discuss what’s behind Russia’s recent military build-up against Ukraine, what it means, Putin’s objectives and what the international community can or might do. Get the full story →

The US's Defense Production Act, which was used to boost the country's own vaccine production, has halted exports of some critical vaccine components. The Serum Institute of India, the world's largest vaccine manufacturer, warned this would limit the amount of vaccine they were able to produce. It would also reduce the US's ranking in our Vaccine Diplomancy Scorecard, which is currently led by China. Get the full story →

Coinbase’s recent Nasdaq listing and Tesla now holding cryptocurrency on its balance sheet signal that cryptocurrency’s inexorable shift to the mainstream is gathering momentum. Government largesse to cushion economies crippled by Covid lockdowns is putting pressure on the credibility of fiat currencies. EM investors have long known about the risks of sovereign financial indiscipline, and in such markets crypto could become an established store of value or medium of exchange. Indeed, Nigeria is currently the world’s third most active crypto market, despite central bank opposition. Get the full story →