We are witnessing the end of the US century, and I don’t think the consequences have fully landed.
Last week I was in a meeting with a global investor asking for proposals to manage a new fund. They had one stipulation: no US-based firms will be considered. Why? So that their investment thesis “can’t be hijacked by implicit or explicit threats”. This is no fringe operation — it’s a substantial blue-chip asset owner, one that cares about its investment strategy’s broader impact, including on climate change. As part of its risk management, it has red-lined US service providers to avoid indirect exposure to erratic US policy.
A few months ago I was on a call with local bank risk managers pondering how much influence the US could have over Swift, the global interbank payment messaging network, and other critical financial infrastructure. Mixed, it turns out: Swift is technically Belgian, but dollar transactions that rely on its messaging could still be affected if the US wanted them to be. There was a sense of foreboding — a concern that irrational US actions, following the example of the tariffs it imposes, could spill into weaponising critical financial infrastructure — and intense thinking about what backups could reduce the risks banks elsewhere face should the US do something crazy.
These are just two anecdotes, but I think they point to something under way. Many major institutions are urgently but quietly trying to reduce exposure to US-influenced economic infrastructure. No central bank is going to stand up in public and say so explicitly, but it is happening.
This is a sea change. Since the end of World War 2, the US has been the foundation of the financial system, thanks to its deep and liquid capital markets — the Treasury market chief among them — and the pervasive presence of the dollar, which is on one side of 89% of all foreign exchange trades, according to the Bank for International Settlements. Among the reasons the country gained that position: trust in US institutions, the credibility of the Federal Reserve, the size of the US economic base and a reliable legal and property rights regime.
Trust is what has changed, and to some extent confidence in Treasuries too. The belief, perhaps lazily held, was that US property rights were sacrosanct and investors would not face political interference. The Securities & Exchange Commission has sharply shifted its enforcement posture since 2025, dropping high-profile crypto prosecutions and scaling back its climate and ESG disclosure agenda. Some of this may be legitimate policy correction, but its speed, its alignment with the administration’s political priorities and allegations of preferential treatment for politically connected crypto firms have created the impression that market regulation is becoming less insulated from politics.
It is going to hurt to leave the US-centric system behind. It lowered transaction costs for everyone — spreads and contract costs shrank as scale grew, and governments grew relaxed about surrendering financial sovereignty to US institutions. The US benefited too: its position at the centre of the system made the dollar more valuable simply as a global store of value and kept Treasury yields lower than they otherwise would have been, as they were the default risk-free instrument. The US’s record debt levels would not have been possible without that status, though those levels were already testing the rest of the world’s tolerance, policy uncertainty aside.
Change is already showing up in the plumbing. Close to home, the Reserve Bank’s real-time gross settlement system is evolving as a cross-border payment mechanism for the Southern African Development Community. The first currency other than the rand it can settle, since July this year, is the Angolan kwanza. Angola is a good example of what happens if the US decides to cut you out of the global financial system: it lost all access to dollar-clearing banking relationships in the mid-2010s, only getting back online in late 2025. Settling the kwanza directly makes trade easier and gives Angola modestly more options.
Alternatives, though still way behind dollar-based systems, are accelerating. China’s cross-border interbank payment system (CIPS) is growing as more global banks — including Standard Bank, since June last year — sign up as an alternative to Swift. Other contenders include a system driven by Brics, a pan-African one backed by Afreximbank, and systems that Russia and India are building. Volumes running through these are still rounding errors next to Swift, but they’re being taken more seriously than ever: CIPS had 1,683 participating institutions by May 2025, 10% more than a year earlier. To be sure, China’s capital controls probably make it worse than even an erratic US, but many institutions will figure it’s better to have feet in both camps.
Payments are the plumbing of the financial system; investment flows are the liquidity running through it. As investors avoid routing flows through US institutions, the plumbing will follow to get them where they want to go. Regulators’ risk worries and investors’ wishes are heading the same way: outside the US-led system.
It is going to be expensive. All this new infrastructure will incur development costs, and weaker liquidity will mean worse prices and bigger spreads. But that is a price worth paying to avoid financial chaos and crises stemming from irrational policy decisions. The fact that it would cost the US too has always been the assumed check keeping things in order. That confidence is now gone.
Theobald is chair of research-led consulting firm Krutham.
