For some time now, China has attracted attention with it’s AIIB, the Asian Infrastructure Investment Bank, a lending bank for infrastructure in developing countries that rivals the World Bank. People have been commenting on how this is a sign of China starting to build it’s own parallel “global order” beginning in Asia — but what I think is more interesting is it shows that any group of people with sufficient capital can do something similar.

There’s no reason why this infrastructure couldn’t be funded via ICO. You may ask — well, what is the advantage of ICO over a pension fund or any of the large accumulations of capital that we already have? The difference is, blockchains can represent large groups of people, and can encode complex contracts between them and other groups of people, similar to what nation states do now. This isn’t a new observation, and I’m not saying these blockchain nations are going to operate in a person-free vacuum — figuring out how code-as-law will co-exist with actual law is currently being figured out. Maybe they will have ambassadors to deal with real nation states!

All I’m saying, is it’s plausible that blockchain nations could become an important part of the ‘international order’ sooner than we think.

The institutions that paved the way for the current in globalization — the World Bank, the IMF, various fiscal & monetary unions — were mostly founded in the first half of the 20th century, and as Daniel Drezner argues, the system still works pretty well. However, cracks are beginning to show. It’s not crazy to believe some kind of radical renewal is just over the horizon, which means there’s a vacuum that blockchain nations might fill.

The way it will start is by blockchain users building a global financial system alongside what we have now. We’ll have ICOs to fund infrastructure (like the World Bank), intermediating protocols to make blockchains comply with certain standards (like the IMF) and exchanges with encoded rules to maintain compatibility between chains (like fiscal and monetary unions). Once the parallel system is built, it only needs to be given legitimacy by an existing institution.

What will this system add on top of the one we have now? Blockchain finance is especially suited to making agreements about highly complex tasks — for example, ICOs are better suited to startups than to simple, centralized projects like building dams. Blockchain might be the missing piece in international agreements that don’t deal yet with the knowledge economy, allowing for e.g. more fine-grained trade deals. It might also allow us to use the new financial engineering of the last 40 years for a wider range of things.

What kind of world will this lead to? Perhaps what Foreign Policy calls ‘neo-medivalism’, where nation states are augmented with loosely associated groups of people with multiple allegiances. Maybe it’ll mean a global group of free speech advocates can fund a social network in Brazil using a derivative made up of 10% of their home values. It seems more possible than it used to be.