Why the Pentagon’s Silent Financial Wars Could Decide the Future of Global Power

NOTE: All material used in this article is collected from publicly available sources.

In today’s great power rivalries, the most decisive battles may not involve tanks or aircraft carriers—but capital flows, debt traps, and currency devaluation. While the Pentagon does not have a “financial wing” in the traditional sense, it is increasingly operating as a central player in financial warfare. As currency conflicts intensify, particularly with rivals like China, Russia, and Iran, the Department of Defense is emerging as a key guardian of America’s—and the West’s—economic sovereignty.

[https://www.spglobal.com/marketintelligence/en/mi/solutions/primer-currency-wars-and-foreign-exchange-manipulation.html]

[https://www.amazon.com/Currency-Wars-Making-Global-Crisis/dp/1591845564]

The Pentagon does not issue sanctions or print money—that’s the domain of the Treasury and the Federal Reserve. But it plays a crucial supporting role in defending the financial architecture underpinning U.S. power. This includes providing military enforcement for embargoes, contributing strategic intelligence on adversarial capital flows, and monitoring technology transfers that could fuel rival military buildups.

In fact, the Pentagon has been conducting war games for years simulating scenarios where hostile states attempt to trigger financial panic. These include dumping U.S. Treasury bonds, manipulating foreign exchange markets, or using cyberattacks to cripple payment infrastructure. These are no longer hypothetical: when Russia was sanctioned over Ukraine, its central bank responded by pegging the ruble to energy exports—an act of financial judo that undermined Western leverage. China, meanwhile, is promoting its digital yuan as part of an alternative trade system to weaken dollar dominance. Iran has used cryptocurrencies to bypass SWIFT restrictions and sustain its defense economy under sanctions.

Cyber Command, an increasingly prominent Pentagon division, plays a direct role in this new terrain. It defends U.S. financial networks against foreign attacks and is developing offensive capabilities that could disrupt an adversary’s financial grid, payment systems, or sovereign digital currency in a crisis. In a currency war, a well-timed digital strike can be as destabilizing as a missile launch.   [https://www.cybercom.mil/]

But financial warfare isn’t only about infrastructure—it’s also about influence. Markets are driven by narrative. Rumors of capital flight, sovereign default, or central bank failure can shake governments faster than any airstrike. The Pentagon is increasingly aware that monetary sovereignty can be manipulated psychologically. Currency confidence is now a target.

Behind the scenes, the Pentagon also collaborates through interagency bodies like the Committee on Foreign Investment in the United States (CFIUS) and the Office of Foreign Assets Control (OFAC). It supplies the national security rationale for denying foreign takeovers or restricting cross-border capital flows. It monitors how adversaries may be embedding surveillance tech, dual-use components, or strategic investment into supply chains. Defense contractors, too, now employ financial analysts, sanction specialists, and supply chain modelers to map out vulnerabilities that could compromise readiness or empower adversaries.

In Israel, this integrated approach between defense and finance is nothing new. The IDF, Shin Bet, and Mossad have long treated economic intelligence and tech containment as core to national defense. From anti-terror financing to semiconductor control, Israel recognizes that economic tools are strategic weapons. The growing cooperation between Israeli agencies and U.S. counterparts—including the Pentagon—underscores a shared recognition that the financial domain is now a frontline of warfare.

This doctrine is becoming formalized. The U.S. National Defense Strategy now frames economic resilience, technology denial, and supply chain protection as core military priorities. Strategic decoupling is not just economic policy—it is deterrence. The goal is not just to win battles, but to starve rival military-industrial complexes of capital, inputs, and legitimacy.

While there is speculation about classified Pentagon capabilities—such as AI-driven financial surveillance, blockchain interdiction, or behavioral modeling of market panic—the broader trend is clear: the battlefield now includes banks, exchanges, and algorithmic networks. The Pentagon may not control the money supply, but it is helping define the rules of engagement in an emerging global economic war.

As geopolitical tensions heat up, the question is not whether the Pentagon will engage in financial warfare—it already is. The real question is whether democracies are ready to defend their monetary sovereignty with the same vigilance they reserve for borders and airspace. Because in this new era, power is measured in both missiles and markets—and those who fail to defend their balance sheets may soon find their national security bankrupt.