Payment Systems

payment-systems measures structural power over the clearing and settlement rails the world's money moves through — who owns and governs the layer everyone must settle through, and who can admit or exclude a counterparty from it. The structural question is: can this state set the terms of access to the settlement system, and switch it off for others? — not how much traffic flows across the network on its behalf.

Strange's defining illustration of structural power is exactly system-ownership that leaves others no alternative:

• "Lloyds of London is an authority in the international market for insurance; it allows big risks to be 'sold' by small insurers… thus centralizing the system… Anyone who needs insurance has to go along with this way of doing things" (Strange 1994, p.25) — system-ownership that leaves no alternative.
• "US structural power over the way in which wheat or corn (maize to the British) is traded allows buyers and sellers to hedge by dealing in 'futures'; even the Soviet Union, when it buys grain, accepts this way of doing things" (Strange 1994, p.25) — even a rival superpower must transact on the dominant state's terms.
• "The power to create credit implies the power to allow or to deny other people the possibility of spending today and paying back tomorrow" (Strange 1994, p.90) — the allow-or-deny logic the exclusion lever rests on.

The analogue for payments: anyone who needs to settle dollars has to go along with US-controlled clearing. The structural choke sits in the clearing layer (CHIPS/Fedwire/Fed), upstream of the SWIFT messaging layer.