The Statist Peril Of Techno-Asset Inflation – OpEd

 August 23, 2026

MISES

By Brendan Brown

Key Takeaways:

• The author defines “techno-asset inflation” as the interaction of monetary inflation and technological revolution that suppresses goods-price rises while driving intense asset-price inflation.
• Historical parallels from the sixteenth-century Northern Renaissance (precious-metal inflows plus printing press and globalization) to today’s digital/AI era show how positive supply shocks camouflage monetary excess, benefiting governments, monopolists and crony interests while fostering malinvestment.
• Current conditions under the 2% inflation standard and multi-decade tech boom are viewed as a high-risk episode of techno-asset inflation, with little indication that central banks are prepared to confront asset-price dangers rather than focus narrowly on consumer-price targets.

There is nothing new about the perils for peace and liberty which stem from the combination of monetary inflation and technological revolution. Indeed, we can find a prime illustration at the dawn of the modern age during the Northern Renaissance in Europe.

But first, towards better describing the peril, I urgently propose a new entry into the economics dictionary: techno-asset inflation. The definition is this: techno-asset inflation is found where monetary inflation and technological revolution interact to produce virulent asset inflation.

The positive supply shock emanating from the technological revolution bears down on goods and services prices. This expands the scope for monetary inflation by impeding an intensification of its symptoms in goods and services markets. Serious symptoms can trigger serious popular resentment. Under these circumstances it is in asset markets rather than goods markets that symptoms of monetary inflation are likely to become most severe. (Note that many asset inflations occur outside technological revolutions; some of these are twinned with positive supply shocks in the form of previous shortage whether due to for example famine, war, or cartel action, going into reverse).

Asset inflation in some of its phases can be popular. That is the case, for example, when there are widespread wealth gains which outweigh—in electoral arithmetic—the diminished or negative returns on government bonds and money. Simultaneously asset inflation might well be beneficial for some key actors, including—with some overlap— big government, election campaigners, crony capitalists and monopolists. These benefits, though, are problematic for a free society. And the malinvestment which is intrinsic to asset inflation eventually takes its toll on prosperity and can stimulate political extremism.

The asset inflation threat is now at a high level—comparable to dangerous episodes in history all the way back to the Northern European Renaissance in the sixteenth and early seventeenth centuries. Yet there is no apparent awareness of the peril in the news about the Fed’s evolving policy framework under its new Chair. Instead, the focus of official communication to date has been the promise of a zero-tolerance policy towards “persistently elevated” inflation.

The best that sound money advocates can now reasonably hope for—not expect—from the task forces at the Fed would be clues that this institution could make a start on tackling its in-built historic deflation phobia. Meanwhile, the laboratory of history does not justify optimism with respect to the menace of techno-asset inflation The history goes all the way back to the Great Monetary Inflation which accompanied the Northern Renaissance in Europe of the sixteenth century and extending into the early seventeenth century, when asset inflation in Holland emerged as the star symptom. 

The technological revolution then had at its core the printing press, great strides in scientific knowledge including astronomy, cartography, and actual exploration especially of the Americas. The monetary inflation with its source in precious metal inflows from Latin America went along with goods inflation averaging 2 per cent annually (in terms of gold prices of goods). The underlying monetary inflation (spawning goods and asset markets) was fiercer overall than the 2 per cent statistic (itself a highly imprecise estimate) might suggest, given the camouflage in goods markets. The camouflage resulted from the positive supply shock related to globalization (new lands discovered and brought into the global economy) and productivity gains (increased knowledge and transmission of information via the printing press).

Monarchs and their governments gained fund-raising advantage from the technology revolution coinciding with the precious metal inflows. There were three channels:

First, the underlying real increase in demand for gold and silver coins as explained by the rise in living standards; this was alongside individuals’ demand for gold and silver to make good the erosion of real monetary holdings by the inflation. This revenue was most important for governments which could get the gold/silver at well below the cost of mining (for example the Spanish sovereigns from their new lands in South America or the English sovereigns—especially Elizabeth I—from seized Spanish bullion boats). 

Second, the scope for a quick rise in inflation-tax revenue from coin debasement, which would have given rise to more public discontent if price inflation (as measured in gold terms) had not been contained by the positive supply shock of technological revolution. This revenue was short-lived and indeed in England Queens Mary and Elizabeth on the advice of Thomas Gresham turned against debasement as practiced by Henry.

Third, the novel and swelling appetite for risky loans—as North European wealth-owners sought to get a high nominal return on loans to compensate for inflation whilst underestimating the risk of default (in modern terms we would describe this as desperation for yield). There was no such thing then as risk-free government debt; all sovereign debt was inherently high-risk. The European center for this loan market was Antwerp (whose population was then larger than London).

Tudor monarchs, Holy roman emperors, and Spanish kings raised funds in the rapidly growing Antwerp loan market. Henry VIII used as his Antwerp agent the merchant Thomas Gresham (of “Gresham’s Law” fame) and his Chancellor Thomas Cromwell had great business connections there. Of note, the Low Countries were the epicenter of economic growth in Europe at this time with corresponding wealth gains; and these countries were variously under the control of Spanish Monarch or the Holy Roman Emperor. All the easier to raise funds to wage war, which was happening now in the context of the Reformation, which Spanish Kings and Holy Roman Emperors sought to turn back.

Asset inflation also had the usual dimension of land prices and land speculation. In England, no doubt this facilitated and incentivized the grab of land from the monasteries by Henry VIII who sold it to a burgeoning merchant class. A terrifying example of the sovereign and religious authorities gaining from asset inflation, in the form of raising capital taxation including confiscation was the Inquisition, most of all in Spain, which financed itself by seizing the property of its victims.

Fast forward to the two great techno-asset inflations of the digital revolution alongside the monetary inflation of the 2 per cent inflation standard, both now in their fourth decade. The first ran from say the mid-1990s to the mid-2000s; the second from early in the second decade (say 2012) and is still on going. The increased supply of goods and services made possible by the ongoing revolution has evolved over time. First early in the revolution there was the general productivity surge in the US and most other countries. Then came the gains from globalization made possible by IT (and also driven by the crony politics of China’s accession to the WTO) alongside rapid productivity growth in the countries acquiring comparative advantage (think of Asia and microchip production).

As for all techno-asset inflations, this has been a good time for big governments raising funds. In modern idiom, persistent camouflage of monetary inflation in goods and service markets has encouraged the Federal Reserve and foreign central banks to pursue manipulated low interest rates. These central banks (and those to whom they answer politically) have been counting on (incorrectly since 2021 for multiple reasons) the camouflage continuing even despite some skepticism in some quarters about this AI phase. They have imagined that their own monetary skills under these circumstances could prevent consumer prices breeching their targets in a way which would trigger popular resentment. Credit risk premiums have been abnormally low for most of the time. Hence there has been a bulge in government indebtedness.

Monopoly capitalism has flourished. And so has crony capitalism. Cronies are heterogeneous, including criminal elements related to businesses which are in effect quasi-Ponzi-schemes in the epicenter of manic speculation. Think of the role of Enron as top election financier of George W. Bush in 2000 or FTX cryptocurrency exchange as second largest contributor to the Joe Biden campaign of 2020. 

And there have been the capital levies and confiscations facilitated by asset inflation. These include crucially a non-indexed capital gains tax and a downward manipulated level of interest rates subject to income taxation which makes no allowance for inflation. Governments have sought to increase the effectiveness of such levies against obvious payer-resistance by attacking traditional rights to bank secrecy and implementing international exchange of information on capital holdings and interest incomes. 

The great asset inflations of Europe in the sixteenth century ultimately led on to the most fantastic one of all in Holland, including the tulip bulbs and the stock in the Dutch East India Company. It took the invasion of Holland in 1672 by the armies of Louis XIV to bring a general crash across all asset classes. Possible ends to the present asset inflation are wide-ranging. The scenario of Chair Warsh and his working parties pre-empting political forces in tackling the threat of asset inflation are implausible.

• About the author: Brendan Brown is a founding partner of Macro Hedge Advisors (www.macrohedgeadvisors.com) and senior fellow at Hudson Institute. As an international monetary and financial economist, consultant, and author, his roles have included Head of Economic Research at Mitsubishi UFJ Financial Group. He is also a Senior Fellow of the Mises Institute. He is the author of Europe’s Century of Crises under Dollar Hegemony: A Dialogue on the Global Tyranny of Unsound Money with Philippe Simonnot. His other books include The Case Against 2 Per Cent Inflation (Palgrave, 2018) and he is publisher of “Monetary Scenarios,” Euro Crash: How Asset Price Inflation Destroys the Wealth of Nations and The Global Curse of the Federal Reserve: Manifesto for a Second Monetarist Revolution.
• Source: This article was published by the Mises Institute

About MISES

The Mises Institute, founded in 1982, teaches the scholarship of Austrian economics, freedom, and peace. The liberal intellectual tradition of Ludwig von Mises (1881-1973) and Murray N. Rothbard (1926-1995) guides us. Accordingly, the Mises Institute seeks a profound and radical shift in the intellectual climate: away from statism and toward a private property order. The Mises Institute encourages critical historical research, and stands against political correctness.

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Crypto Is Flailing

Donald Trump used the White House to pump crypto to unprecedented highs. It’s still collapsing.

By Hadas Thier

April 5, 2026

Source: Jacobin

It feels like just yesterday when crypto markets last crashed hard. Back in 2022, what had been a wildly careening celebrity- and media-fueled hype train suddenly was a smoldering wreckage. Those were the days of Sam Bankman-Fried’s fraud-riddled FTX exchange, which went belly up along with a slew of other big crypto projects. The price of Bitcoin, the largest and most trend-setting of thousands of cryptocurrencies, dropped from its high of over $64,000 in 2021 to barely hitting $17,000 by 2022’s end. Along with Bitcoin, all things crypto sank.

It felt at the time as though we all awoke from a bizarre collective dream in which mass-produced JPGs of cartoon monkeys had sold for prices that rivaled those of an average home, and trading made-up digital tokens on your phone promised to deliver unthinkable riches for the brave of heart. In the wake of crypto’s crash, most people preferred to tune out anything that included words like “blockchain,” “NFTs,” or “Bitcoin.” Even when prices for crypto recovered in 2024, the cringey backwash of 2022 clung on within mainstream public opinion.

And then came Donald Trump.

Trump returned to the White House with a promise to make crypto great again and the United States “the crypto capital of the world.” The crypto industry, in a coming-of-age moment, lavished the aspiring Bitcoiner in chief and other crypto-friendly candidates with mountains of cash during the 2024 elections, organizing the most aggressive fundraising operation it had marshaled yet. According to Public Citizen, nearly half of corporate contributions in that year’s cycle came from the crypto lobby. On the campaign trail, Trump responded in kind and, as a new crypto convert, pledged to help Bitcoin prices “skyrocket like never before.”

The newly forged Trump and crypto-capitalist alliance paid off handsomely for the industry and, predictably, to the Trump family.As of January, the Trump family fortune grew by more than $1.4 billion from its crypto empire, which crisscrosses the digital markets landscape: from TRUMP and MELANIA “memecoins,” to non-fungible token (NFT) Trump trading cards, to a Bitcoin mining company, to the World Liberty Financial crypto platform (including its own WLFI token and USD1 “stablecoin,” both among the top forty cryptocurrencies by market capitalization)

Using his position as the most powerful (and least accountable) politician in the most powerful nation in the world, Trump made quick work of defanging an already barely regulated industry. The president pardoned high-profile crypto criminals (mostly those that invested in his crypto projects), pushed a series of pro-crypto bills in Congress, and announced the creation of a government Strategic Bitcoin Reserve, while his regulatory appointees dropped every major crypto-related investigation and lawsuit meant to rein in fraud, market manipulation, money laundering, sanctions violations, and other basic securities violations.

With regulatory doors flung wide open, crypto was poised to become mainstream and be adopted by the same financial institutions that the crypto movement once claimed to rebel against. Money was flowing into crypto, and prices were booming. Bitcoin prices peaked at an unthinkable $126,000 last October. The size of the crypto market ballooned from a capitalization of $1.7 trillion at the end of 2023, to $3.5 trillion the following year after Trump’s election. It broke the $4 trillion mark by September of 2025.

But four months later, despite having thrown everything but the kitchen sink to power a crypto boom, the market shrunk back to just over $2 trillion. Bitcoin fell to half its peak and is now fighting to clear the $70,000 mark. Despite no-holds-barred boosting from the world’s most powerful and brazen politician, crypto is flailing. What happened?

What Goes Up Must Come Down

Crypto prices first began their recovery in 2024, before Trump returned to the White House. This was largely because President Joe Biden’s Securities and Exchange Commission (SEC) had already approved of a trendy Wall Street instrument called exchange-traded funds (ETF) to include Bitcoin and another major cryptocurrency, Ether. ETFs are funds run by asset managers like BlackRock or Fidelity that hold a basket of underlying assets. They issue shares of those funds, which track the value of their assets. In the case of Bitcoin and Ether ETFs, investors gain exposure to crypto price movements without having to set up crypto “wallets” and buy the digital assets themselves.

Wall Street loved it. But ordinary Americans were exposed to them, whether or not they knew it. Nearly a dozen US pension funds and at least a couple of state pensions have invested in crypto ETFs, binding the financial health of millions of working people to the volatility of the crypto markets. Crypto ETF growth drove demand for Bitcoin and Ether and pushed the rest of the industry along with them.

Once in office, and with Wall Street’s entanglement with crypto by now growing, Trump intervened to clear the industry’s path “to the moon” through legal legitimization and deregulation. Crypto companies and traditional financial institutions partied like it was 1929.

The Trump-crypto bloc used three major prongs to get there. First, by issuing pardons and throwing out every major lawsuit and investigation, Trump did more than signal to crypto criminals that they need only drop hundreds of millions of dollars to curry his favor. He also signaled to the whole crypto industry that anything goes, and to banks and traditional finance that they can feel free to play in crypto’s murky waters without worrying about legal consequences.

Second, Trump’s SEC reversed course from Biden’s and recently declared that crypto tokens and assets are definitely NOT securities (tradable financial instruments) — and therefore cannot be regulated as such. (Their all caps, not mine.) Defining tokens as securities had been the linchpin of previous attempts to begin to regulate a thoroughly unregulated field. Now reversing this position essentially gave the message that crypto is “not the SEC’s problem.” The rules that apply to the rest of capital markets don’t apply here.

Last, Trump leaned on Republican lawmakers to draw up legislation (allegedly with middle-of-the-night phone calls) — pulled directly from industry white papers and finessed with closed-door meetings with crypto leaders — to “future-proof” the regulatory about-face. The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, passed last summer, enshrines the nearly $300 billion worth of crypto stablecoins as legally recognized, privately issued currency, operating with minimal oversight.

The Digital Asset Market Clarity (CLARITY) Act essentially does the same for other cryptocurrencies. It provides carve-outs to crypto tokens, crypto exchanges, crypto advisers, and crypto funds and portfolios from all existing major securities laws. The CLARITY Act is currently being held up while the crypto industry and banking industry fight over how far stablecoins can go. Coinbase CEO Brian Armstrong scuppered negotiations, and after he met with the president, Trump took to Truth Social to berate the bankers as well.

Trump couldn’t take total credit for his midnight calls creating congressional compliance. According to FinTech Weekly, “Seven of the forty-six senators currently sitting on the two Senate committees with direct control over the CLARITY Act received a combined $265,500 in direct contributions from individuals employed at or affiliated with crypto companies during the 2025-2026 cycle,” including the CEOs of Coinbase, Ripple, Kraken, and founders of Blackstone.

This all pales in comparison, though, to the money poured in by Fairshake, the crypto super PAC, which has already spent an unprecedented $271 million on the 2026 midterm elections — delivering a not-subtle message to legislators about what will happen if they don’t toe the crypto line.

And yet, with all the might of the White House and billionaire crypto capitalists flexing, the markets are flailing.

The increased participation of traditional finance turned out to be a double-edged sword. Just as quickly as investor cash can flow into the market, it can flow out. And institutional investors, at first sign of market retreat, always dump their riskiest assets (i.e., crypto) first. Beginning last fall, a combination of fears of tightening Fed rates, Trump’s tariff shocks, and war with Iran spooked Wall Street. In early February, investors yanked roughly a billion dollars from ETF funds in one week alone.

The sudden collapse undermined the crypto narrative that it was on an unstoppable flight to the moon, and that Bitcoin in particular was like a “digital gold.” Maja Vujinovic, CEO of digital assets at FG Nexus, told CNBC: ”[The] straight line bull run that a lot of people expected hasn’t really materialized yet. Bitcoin isn’t trading on hype anymore; the story has lost a bit of that plot. It is trading on pure liquidity and capital flows.”

In other words, gone are the days when celebrities could be counted on to whip up extra hype every time the market flags. The crypto market, instead, is dependent on institutional capital flows.

But outside of crypto’s extreme price cycles lies a more long-term and dangerous consequence. The partnership between Trump and the crypto industry is not just one of extreme moneymaking and grift (although it is both). The alliance more dangerously solidified a power bloc of anarchocapitalists, Silicon Valley venture capitalists, and Trump’s burgeoning authoritarian state. Crypto creates easy avenues for that alliance to grow in opaque ways, with the president’s sundry crypto projects giving any criminal or foreign interest that cares to invest in them special access to the president.

That bloc is legitimizing a parallel, almost completely unregulated, financial ecosystem, even more shadowy than Wall Street’s current very shadowy banking system. That legitimacy has the potential to create an even greater proliferation of stablecoins, holding billions — perhaps trillions — of Treasury securities to back their reserves. If those stablecoins collapse, as unregulated financial bodies in particular have a habit of doing, their issuers would need to to sell off high volumes of securities, destabilizing markets.

If the crypto market continues to collapse, Wall Street and their political cronies will lose interest, and the shadowy ecosystem will idle, at least for the time being. But even so, as long as the legislation and regulatory capture continues, crypto will use the new legal framework currently being put in place and pick up where it left off if at the next wild boom.Email

Hadas Thier

Hadas Thier is a writer, journalist, and activist based in Brooklyn, N.Y. She is the author of A People’s Guide to Capitalism: An Introduction to Marxist Economics.

How A British Overseas Territory Became The Largest Holder Of U.S. Debt – Analysis




Cayman Islands

The Cayman Islands sits at the heart of a network of British financial jurisdictions. Together, they manage trillions in assets, influencing global capital flows and investment networks.

March 21, 2026 
By John P. Ruehl


China, which was the largest holder of U.S. government debt as recently as 2019, has cut its holdings to the lowest level since 2008, driven by changing trade patterns, geopolitical concerns, and domestic economic pressures.

The Cayman Islands has emerged as an unlikely place to fill the gap. This small British overseas territory held $427 billion in U.S. Treasuries as of November 2025, making it the sixth-largest foreign holder. But a 2025 Federal Reserve analysis revealed that the total figure was actually closer to $1.4 trillion by the end of 2024—with some estimates reaching as high as $1.85 trillion—after nearly 40 percent of new treasury notes and bonds were purchased in the Cayman Islands after 2022.

While these figures suggest that the territory is the largest foreign holder of U.S. debt, the main buyers are not Caymanians or the government, but hedge funds. After the territory passed its Mutual Funds Law in 1993 amid the 1990s hedge fund boom, these vehicles began incorporating in large numbers, drawn by flexible regulation and low taxes. The Cayman Islands today is home to roughly three-quarters of the world’s offshore hedge funds.

Many have used so-called “basis trades,” borrowing heavily to profit from small price gaps between U.S. Treasury bonds and their future equivalents. The strategy has grown so large and opaque that it has triggered a Federal Reserve investigation.

Emergence and Evolution of a Financial Hub

The Cayman Islands has played a major role in global finance since the 1960s, operating as a center for tax evasion and asset parking. Mostly European banks trading in dollars outside the U.S., nicknamed Eurodollars, could lend these dollars beyond the reach of American regulations and capital controls. As the market grew, the Cayman Islands became a central place to store and use these Eurodollars.

Local Cayman lawmakers also passed financial laws to attract international businesses in the 1960s, including having no direct taxes on individuals, corporate profits, or capital gains, which helped cement the islands’ role as an offshore financial center. The legal system, based on English common law, offered clear rules, modern legislation, and independent courts. Packaged into a simple, finance-focused framework, it gave investors confidence and turned the territory into a quiet financial powerhouse.

Despite the Cayman Islands’ own elected government led by a premier, key powers remain with the United Kingdom. Final appeals in major cases are heard in London, while a governor appointed by the British monarch, on the advice of the British government, oversees internal security and coordinates foreign affairs with London. In theory, Britain can also intervene in the territory’s governance, providing a level of political stability valued by outside investors.

The Cayman Islands’ success has come from a “collaborative policymaking process that involved local leaders, expatriate professionals, and British officials,” according to a working paper by the University of Alabama, along with embracing financial trends. Home to more than 120,000 companies as of 2025, including thousands registered at the five-story Ugland House, hedge funds are just one of several recent financial booms. The parent company of Theleme Partners LLP, a hedge fund linked to former UK Prime Minister Rishi Sunak, “lists the notorious Ugland House as its address. The small office is the registered home to approximately 40,000 entities,” stated the Good Law Project.

In 2022, the bankruptcy of cryptocurrency exchange FTX exposed billions in missing customer funds and became one of the largest financial frauds of the decade. Court filings showed that more than a fifth of its registered customer accounts were from the Cayman Islands—greater than any other jurisdiction—highlighting how easily new and risky ventures could be structured.

The territory also plays a central role in shadow banking. After banks pulled back from lending following the 2008 financial crisis, non-bank loans and financing surged, and many such funds have been domiciled in the Cayman Islands, such as Blackstone’s iCapital Offshore Access Fund SPC.

The Cayman Islands were also central to the 2020–2021 boom in special purpose acquisition companies (SPACs), which raised capital through IPOs to merge with private firms and take them public. Of the more than $100 billion raised in 2021, half of the SPACs were Cayman-incorporated. Rising interest rates and increased regulatory scrutiny slowed the expansion, but SPAC activity in Cayman has seen a resurgence since 2024.

It also sits at the center of China–U.S. capital markets. Because Chinese law restricts foreign ownership in certain industries, many Chinese firms list abroad via Cayman holding companies using variable interest entity (VIE) structures. This includes giant Chinese e-commerce company Alibaba, whose ultimate parent company is incorporated in the Cayman Islands.

The scale is remarkable, with Cayman-registered investment funds holding more than $8 trillion in assets by the end of 2023, in a territory with a population of less than 80,000 people.

London and Other Jurisdictions

The Cayman Islands are part of a wider network of British-linked financial jurisdictions. According to Global Financial Integrity, “The UK’s offshore tax havens are estimated to facilitate nearly 40 percent of the tax revenue losses suffered annually by countries around the world.”

This system is closely tied to the City of London, a nearly 2,000-year-oldfinancial district that hosts some of the world’s largest banks, law firms, insurers, and financial services companies. London-based institutions design and manage offshore structures, earning substantial fees while channeling capital through London’s broader financial system, helping the city competewith Wall Street and other global financial centers.

The U.S. largely tolerates this arrangement, since it is operated through a close ally and provides a trusted platform for U.S. investors, ultra-wealthy individuals, and corporations to park and deploy capital. Unlike American territories, which are bound by federal law, British-linked jurisdictions can set their own corporate and tax rules with minimal oversight.

While the Cayman Islands may be Britain’s most prominent offshore jurisdiction, other British territories in the Caribbean also play influential roles. The British Virgin Islands (BVI) has become a major center for company incorporation. Its International Business Companies Act, introduced in 1984, simplified company formation, and the BVI is now the “leading domicile for corporate registrations.” With roughly 400,000 companiesregistered there, many of them simple shell companies with often unknown owners, it surpasses even the Cayman Islands in number.

BVI-registered companies hold around $1.5 trillion in assets, while the territory’s GDP is around $1.7 billion. The 2016 Panama Papers, leaked from law firm Mossack Fonseca, revealed that a massive share of the shell companies used by politicians, oligarchs, celebrities, and criminals to shelter wealth were registered in the BVI. Mossack Fonseca was reportedly unaware of the owners of 75 percent of the offshore entities.

Similarly, the Paradise Papers, leaked from law firm Appleby in the British Overseas Territory of Bermuda, highlighted how corporations and individuals used offshore structures for tax planning and asset protection. Bermuda is also the global “leader in captive reinsurance companies,” hosting many of the world’s largest catastrophe insurers and reinsurers. Investors can hedge or speculate on risks ranging from hurricanes to financial shocks.

In 2023, Vesttoo, a Bermuda-based insurtech company, used fake collateral documents to back reinsurance deals, fabricating billions in financial guarantees, in what a Delaware court filing described as Bermuda’s “largest insurance fraud ever.” In October 2024, the Tax Justice UK ranked the BVI and Cayman Islands as the world’s most damaging tax havens, with Bermuda coming in third place.

While these territories are notorious globally, Britain’s Crown Dependencies—specifically Jersey, Guernsey, and the Isle of Man—serve a more Europe-facing role. More self-governing than the British overseas territories but still closely tied to the City of London, they specialize in wealth management for European and global clients.

Their European focus does not mean all funds are European. These jurisdictions often act as gateways, channeling wealth from around the world into investment vehicles that can then be deployed into Europe. In 2019, Jersey authorities announced the seizure of more than $267 million from people connected to former Nigerian dictator Sani Abacha, found in an account held by shell company Doraville Properties Corporation.

Guernsey and the Isle of Man have also faced headwinds recently. In early 2026, Guernsey regulators fined Utmost International Guernsey a record £1.96 million, or approximately $2.5 million, for failures in establishing anti-money laundering controls after the firm did not properly monitor high-risk clients for over a decade, many having links to South and Central America.

The Isle of Man has, meanwhile, developed one of the world’s largest online gambling licensing regimes, and regulators have signaled concern about its vulnerability to misuse. Authorities flagged online gambling as a money laundering risk in 2026, warning that organized crime groups, particularly from Southeast Asia, were exploiting its platforms.

These jurisdictions are deeply interconnected. Multinational investment firm Brevan Howard is headquartered in Jersey but manages separate Cayman Islands-domiciled hedge funds. BH Macro Limited, based in Guernsey, meanwhile, channels nearly all its investments into the Cayman-domiciled Brevan Howard Master Fund, transporting billions of dollars across global markets.

Regulation Attempts

The activity of these jurisdictions continues to attract international regulatory attention. The Organization for Economic Cooperation and Development (OECD) is currently pushing for greater tax transparency through a variety of initiatives.

Even the UK has taken notice: a 2022 inquiry into corruption in the BVI, led by former Court of Appeal judge Gary Hickinbottom, concluded that “almost everywhere, the principles of good governance, such as openness, transparency and even the rule of law, are ignored,” and recommended that the government be dissolved. Former UK Deputy Foreign Secretary Andrew Mitchell, meanwhile, warned in 2024 that nearly 40 percent of the world’s dirty money flowed through the City of London and British foreign jurisdictions.

U.S. authorities are similarly looking to step in. In 2022, BVI Premier Andrew Fahie was arrested by the Drug Enforcement Administration in Miami on charges of money laundering and conspiring to import cocaine into the U.S. for Mexico’s Sinaloa cartel in exchange for a cut of the profit.

And as tensions with Iran continue to rise, greater attention is likely to focus on how Iranian regime figures and their proxies have used international financial networks to hold and move wealth, including through London properties and UK-registered entities.

Such attention, however, has existed for years. In 2009, former President Barack Obama noted that the Cayman Islands’ Ugland House was either “the largest building in the world or the largest tax scam in the world,” in a critique of offshore registries. In response, former president of the Cayman Islands Financial Services Authority, Anthony Travers, stated thatDelaware’s Corporation Trust Center is the registered office of almost 220,000 companies, highlighting how American jurisdictions also play a similar game.

Despite rivalries, UK and U.S.-linked financial systems are deeply integrated. Institutions like the International Accounting Standards Board are based in the City of London but legally registered in Delaware. While it sets accounting rules, such entities primarily serve to protect the offshore industry and ensure all players stay aligned.

These offshore hubs thrive because elites, companies, and wealthy interests rely on them to move and shelter enormous sums of money. Though only decades old, the British offshore system is continually adapting to changing global economic conditions and financial trends. Given their value to powerful actors and the stakes involved in altering the system, these jurisdictions will resist any significant regulation that threatens the flow of wealth to ensure they remain central players in global finance.

Author Bio: John P. Ruehl is an Australian-American journalist living in Washington, D.C., and a world affairs correspondent for the Independent Media Institute. He is a contributor to several foreign affairs publications, and his book, Budget Superpower: How Russia Challenges the West With an Economy Smaller Than Texas’, was published in December 2022.

Credit Line: This article was produced by Economy for All, a project of the Independent Media Institute.