Geopolitics of currencies: “We are leaving behind the PlayStation Business era,” notes Jean-Patrick Yanitch

As global power rivalries spill into the monetary arena, the stability of the dollar and the rise of alternative currencies have become strategic concerns for business leaders. Ahead of the ESSEC Institute for Geopolitics & Business event “Geopolitics of Currencies: Europe’s Way Amid Power Shifts and Financial Instability” (17 September 2025), we spoke with Jean-Patrick Yanitch, Partner at Oliver Wyman and former Secretary and Chief Strategist of the G20. In this interview, he explains why the renminbi is not yet a true rival to the dollar, why gold has quietly become the safe-haven of choice, and how European companies must prepare for a future of heightened volatility, complex currency management, and possible monetary fragmentation.

From your perspective, how are shifting power dynamics between Washington and Beijing reshaping the global monetary order, and what does this mean for Europe?

Jean-Patrick Yanitch – In the short term, the monetary issue is more complex and, I would say, less binary than current geopolitical or trade developments. In the monetary domain, the renminbi still plays only a marginal role among international currencies (around 3% of global reserves). It is not a real competitor to the dollar at this stage. The issue is actually broader: U.S. foreign policy has eroded confidence in the dollar, and other major international currencies—including the euro—have more or less benefited from a spillover effect. Many actors are now considering alternative arrangements should the dollar falter in its role as the dominant international currency.

Let’s put things into perspective: today, half of intra-BRICS trade is denominated in renminbi… but this intra-BRICS trade accounts for only 10% of those countries’ total exchanges. The big winner of this global loss of confidence is not another currency but gold: its share in global reserves has doubled over the past decade, now reaching one-fifth of the total.

The ESSEC Institute warns about the risk of a monetary competitiveness shock driven by potential dollar devaluation and instability in U.S. monetary policy. How should European businesses prepare for such a scenario?

J-P.Y. – The weaponization of the world’s main reserve currency is now a reality. In the short term, European companies can only hedge their currency risk—at a cost—and seek, where possible, to reduce their net exposure to the dollar. In the longer term, much will depend on the evolution of the international monetary system as a whole. Let me briefly sketch three scenarios:

• If the dollar’s hegemony persists—albeit under increasing pressure—exchange rate volatility and risks will certainly be higher, but changes for European companies will not be fundamental. Beyond hedging FX exposures, firms will likely seek to gradually diversify financial partners outside the dollar zone.
• In a multi-currency system, with greater diversity in international currencies, payment complexity will increase. Much more sophisticated multi-currency treasury management will be needed, with wider use of local currencies. A key challenge for European companies will be to more actively promote invoicing in euros.
• In a more extreme scenario of monetary fragmentation—with dissociated blocs—reshoring will become increasingly necessary in order to maintain market access.

Currency and financial volatility often translate into higher capital costs and disrupted trade flows. What tools can boards and CFOs use to mitigate these risks in the current geopolitical environment?

J-P.Y. – Within the traditional toolkit available to CFOs and boards—beyond market instruments such as forwards, futures, options, and swaps—companies will increasingly need to rely on operational hedging strategies that directly embed geopolitical realities into operations and commercial practices: aligning costs and revenues in the same currency, adjusting payment terms based on FX forecasts, diversifying currencies and regions to reduce concentration risk, and leveraging the euro’s status to invoice in our own currency.

They will try to avoid currency mismatches on their balance sheets (for example, financing foreign assets in local currency) and ensure netting of intra-group payments so that only net amounts are exchanged, thereby reducing unnecessary exposure per transaction. It is also likely that advanced dynamic hedging programs will be deployed, refining protection according to volatility, economic and geopolitical forecasts, and business cycles. In short, adopting a “multi-system” approach and closely monitoring geopolitical and monetary developments will become essential for any CFO operating in international markets.

China has strategically leveraged subsidies, trade penetration, and currency policies to strengthen its economic influence. How might the renminbi’s role evolve in global markets, and what risks or opportunities does this pose for European firms?

J-P.Y. – I already touched on this earlier. Turning the renminbi into a true international—or even dominant—currency certainly offers undeniable economic and geostrategic advantages for the PRC, but it also comes at a cost: loss of monetary control, opening of financial flows, structural appreciation of the currency, and the duty to ensure international liquidity provision in times of crisis. It is not clear that China is willing or able to shoulder this responsibility today. History shows—even for the U.S. dollar—that becoming a dominant international currency takes decades.

Conversely, even though the ECB has consistently adhered to its doctrine of “neither promoting nor hindering” the international role of the euro, in practice European companies benefit enormously from a recognized and strong international currency in an uncertain world. Twenty-five years after its creation, the euro clearly offers protective advantages to European firms.

Finally, do you see value in embedding geopolitical foresight into corporate financial governance—potentially through new roles like a Chief Geopolitics Officer—to anticipate currency and financial disruptions?

J-P.Y. – In today’s increasingly complex environment—on the brink of structural shifts—geopolitical foresight and a deep understanding of national, regional, and global dynamics are essential for C-level decision-making. We are leaving behind what I sometimes call the “PlayStation Business”: a world where companies could decide to finance, export, and locate production almost anywhere with relatively minimal constraints, guided mainly by market prospects and local conditions. That era of low financial friction and stable international monetary infrastructure—except in brief systemic crises like in 2008- is over.

Does this mean creating yet another C-level position? I remain cautious. Not every new challenge requires a new title. But it is essential that CFOs, risk officers, strategy leaders—and of course CEOs themselves—equip their teams with strong geopolitical analysis and foresight capabilities. We are entering a permanently hyper-complex world of structural upheavals, and companies can no longer treat geopolitics as an interesting but abstract salon topic.

ABOUT THE ESSEC INSTITUTE FOR GEOPOLITICS & BUSINESS

Created in 2024 by ESSEC, the Institute for Geopolitics & Business examines how geopolitical shocks reshape companies’ economic models.

Operating across ESSEC Business School’s campuses in France, Morocco, and Singapore, it brings a tri-continental perspective to what drives corporate competitiveness in the post-globalization era: vigilance, resilience, independence.

It feeds into ESSEC’s degree programs, executive education, and research to foster a new generation of geopolitics-proof business leaders capable of steering and growing companies amid an increasingly brutalized world.

Rooted in ESSEC’s academic excellence, the Institute draws on 4 flagship centers:

• the IRENE Center for Negotiation & Mediation,
• the Center for Geopolitics, Defense & Leadership,
• the Center for European Law & Economics, and
• the Chair Business & Industry in Africa.

Contact: Thomas FRIANG, Executive Director of the ESSEC Institute for Geopolitics & Business - friang@essec.edudu