Breaking the greed loop with AI and public digital money

The same tools now used to entrench banking power could be re-engineered to fund inclusion, transparency, and real economic growth.

When I was a young journalist, some very cynical and droll colleagues told this joke:

Q: What is the collective noun for bankers?

A: A wunch. * (if you don’t get it mail me.)

Over the years, the punchline has come to feel more like a commentary on how concentrated banking power shapes who gets access to money and on what terms, fundamentally affecting the quality of our governance.

We already know what it takes to reduce poverty because there is no shortage of solutions to ensuring children are well‑nourished and able to learn, to building reliable power, water, and roads, enabling farmers and small enterprises, and providing affordable healthcare.

So the question is not just why money and political will are scarce, but how the machinery that accumulates wealth, the decisions of governments, and the lives of ordinary people are bound together in the same loop.

Today, most money is created by commercial banks rather than central banks. This occurs when a bank issues a loan. Instead of transferring existing deposits, it simultaneously creates a matching deposit on the liability side of its balance sheet, effectively generating new money tied to the borrower's promise to repay.

It’s a little simplistic to say that’s creating money out of thin air, because in practice it is constrained by asset backing, capital requirements, and liquidity rules, which channel lending toward borrowers seen as safe and profitable, not toward those with greatest need, but

But clearly, this system is not just unfair, it fosters a cycle we might call the “greed reward loop”.

Banks lend to the wealthy, who use the credit to buy existing assets. Asset prices rise, inflating wealth. That greater wealth signals safety to banks, reinforcing further lending to the same group. Meanwhile, poorer households and small businesses are excluded or forced into high‑interest debt.

Iceland’s financial crisis in 2008 provides a rare example of a different path. Its three major banks, Kaupthing, Landsbanki, and Glitnir, had grown to more than ten times the size of the Icelandic economy. Faced with collapse, the government passed emergency legislation to take control, guarantee domestic deposits, split new banks from failed entities, and prioritise domestic claims over foreign creditors. Strict capital controls were imposed and the domestic financial system rallied. With support from the IMF and Nordic lenders, the country stabilised and gradually lifted these controls by 2017. This response showed that during a crisis, political will can override orthodox bailout procedures. Iceland also held officials and bankers accountable, with prosecutions reflecting a commitment to restoring trust.

In 2008, Ecuador’s government commissioned an audit of its foreign debt. The investigation concluded that parts of the debt had been contracted under irregular and harmful conditions, with terms that benefited lenders more than the Ecuadorian people. On that basis, President Rafael Correa declared a moratorium on a portion of the country’s bonds, forcing creditors to negotiate. Ecuador eventually bought back much of the debt at a steep discount, freeing fiscal space for social spending and infrastructure. While controversial internationally, the move demonstrated that a small country could challenge creditors and redirect resources toward domestic priorities.

When the Asian financial crisis hit in 1997, Malaysia broke from the IMF-endorsed approach of raising interest rates and liberalising capital flows. Under Prime Minister Mahathir Mohamad, the government imposed strict capital controls, pegged the ringgit to the US dollar, and restricted the repatriation of foreign investments. These measures insulated the economy from the worst of the regional contagion, stabilised its currency, and allowed recovery without the deep austerity seen in neighbouring countries. Critics argued the controls would deter foreign investment, but Malaysia returned to growth faster than most of its peers, proving that defying orthodoxy could carry less risk than expected.

Closer to home, Ghana has also tested the limits of the international financial order. In the early 2000s, it entered the Highly Indebted Poor Countries Initiative, securing significant debt relief in exchange for policy reforms and social spending commitments. More recently, in 2022 and 2023, facing another debt crisis, the government launched a Domestic Debt Exchange Programme that required local bondholders, including banks and pension funds, to accept lower interest payments and longer maturities. While this restructuring was necessary to unlock IMF support, it drew resistance from domestic institutions and unease from international investors concerned about the precedent of local creditors being made to take losses. Ghana's actions in both cases demonstrated the conflict between safeguarding national fiscal space and meeting global capital's expectations.

While this restructuring was necessary to unlock IMF support, it drew resistance from domestic institutions and unease from international investors, who worried about the precedent of local creditors being made to take losses. In both cases, Ghana’s actions revealed the tension between protecting national fiscal space and complying with the expectations of global capital.

These cases also show that a country’s political choices, especially those aimed at reducing poverty, are often constrained by the international money system. The structures and rules that govern global finance can limit the space for domestic policy, forcing governments to prioritise creditor confidence and capital mobility over investment in people and infrastructure.

The existing world order is not neutral; it rewards those who preserve the channels through which wealth flows upward and punishes those who interrupt them. When countries attempt to rewrite those rules, they are not just contesting economic orthodoxy; they are threatening a system whose stability depends on keeping the greed reward loop intact.

Meaningful change will never come from tweaking rules at the margins. It requires taking back the power to create and direct money from the private institutions that now use it to feed speculation and concentrate wealth. That means building public systems capable of issuing credit for purposes that strengthen communities rather than inflate asset bubbles.

Central Bank Digital Currencies (CBDCs) offer one route. These are digital wallets issued directly by central banks, operating alongside cash, with the potential to move money instantly and at near-zero cost without passing through commercial banks. More than 130 countries are now researching or piloting CBDCs, from China’s e-CNY to the Bahamas’ Sand Dollar. Properly designed, they could bypass many of the choke points where private banks ration credit, enabling governments to deliver targeted investment, emergency relief, or universal income directly to citizens. But without public oversight, CBDCs will simply become another tool for the same financial alliances, efficient for them but just as exclusionary for everyone else.

This is where AI changes what’s possible. For the first time, we have the technology to run a parallel financial system that is not only fast and low-cost, but also transparent and self-correcting. Imagine every citizen holding a public digital wallet with an AI assistant built in. It could help manage household budgets, flag predatory lending in real time, and connect people or small enterprises to fair, affordable credit. At a national level, AI could map every major flow of credit, showing which sectors are being overfunded and which are starved, information that today is either hidden or arrives years too late. It could match community projects directly with public or private capital, releasing funds when milestones are met, and it could scan transactions to detect the pipelines that move wealth into tax havens and shell companies.

Across global financial services, artificial intelligence, particularly machine learning, has begun reshaping key functions such as credit risk analysis, algorithmic trading, payments, and anti‑money‑laundering enforcement. Generative AI is extending that influence even further, enabling more transparent, responsive, and inclusive financial infrastructure. These capabilities suggest the technology could serve as the foundation for a system that functions with fewer intermediaries and greater public purpose.

The Bank for International Settlements (BIS), in its 2025 Annual Economic Report, describes a "next‑generation monetary and financial system" built on tokenised platforms incorporating central bank reserves, commercial bank money, and government bonds on unified ledgers. Such innovation points toward an architecture capable of delivering programmable money and services that could run alongside, or in place of, current banking structures.

Stablecoins and decentralised finance (DeFi) are already demonstrating what peer-to-peer financial services without traditional banks might look like. Stablecoins offer a faster, cheaper, traceable alternative for cross‑border payments, challenging the costly, fragmented global transfer system. DeFi platforms enable lending, borrowing, and saving via smart contracts, without needing banks, provided that transparency and safeguards are improved.

Together, these sources build the case that AI, tokenisation, and decentralised technologies are actively redefining how money can be created, governed, and distributed, opening a path toward alternatives that place public interest at their core.

The components already exist. India’s Aadhaar digital ID and Unified Payments Interface have shown how instant, low-cost transfers can be rolled out to hundreds of millions. Brazil’s Pix payment system has transformed financial inclusion almost overnight. Europe's open banking frameworks demonstrate the secure sharing of customer-permissioned data across institutions. Combine these with AI-driven analytics, and a country could, within a few years, operate a CBDC-based public finance network in parallel to its existing banking system, one designed from the start to prioritise productive investment and social stability.

China’s integration of payments into everyday apps shows what happens when such systems scale. Through WeChat Pay and Alipay, users can transfer money, settle bills, buy goods, and access micro-loans entirely within a chat or e-commerce interface, often without going through a traditional bank. This parallel infrastructure is fast, frictionless, and woven into daily life, making digital payments the default.

An AI-enabled version of this model, in a public-governed context, could integrate real-time financial guidance, with a wallet-based AI assistant helping households manage spending, flag predatory loan offers, and model repayment plans. AI risk models could allocate micro-loans or business capital based on verifiable economic need and repayment potential, rather than political influence or existing wealth.

Governments could channel subsidies, disaster relief, or universal income directly to citizens’ wallets within minutes, with AI verifying eligibility and preventing duplication.

Community projects seeking funding could be automatically paired with public or private capital, with funds released in stages when AI-verified milestones are met.

With these capabilities, a CBDC-based public finance network could operate alongside existing banks, offering inclusion by default while ensuring public oversight and privacy protections.

The point is not to upgrade the existing system’s efficiency. It is to build an alternative that is transparent, accountable, and publicly governed. For the first time, the combination of CBDCs and AI offers a realistic way to design a financial infrastructure where inclusion is the default and speculation is denied its privileged place.

But if we let banks, corporations, and compliant regulators keep these tools, they will use them to maintain their power for decades. But if we choose to deploy them to break the greed loop, we could reconfigure money itself, giving every person not just access to finance but a real stake in a system built to serve the public.