12 Sep Are We Witnessing the Rise of the Sovereign Individual?
in Education
The rise of cryptocurrencies and digital assets reflects predictions from The Sovereign Individual and the vision of economist, Milton Friedman, of an unstoppable internet money, amid weakening state control, which enables borderless economic activity, and empowers individuals to achieve greater financial autonomy. From inflation-hit nations adopting stablecoins, to regulatory acceptance of Bitcoin in developed economies, digital assets are reshaping the balance between states and citizens, fostering pluralism in governance, and accelerating a shift toward individual sovereignty. While governments attempt to integrate and regulate crypto, their very acceptance highlights the paradox of legitimising tools that allow people to operate beyond traditional financial systems, signalling a profound structural transformation in how power and trust are distributed globally.
Are Geopolitical Events Aligning with the Conditions Described in the Sovereign Individual?
In the 1997 book, The Sovereign Individual, authors James Dale Davidson and Lord William Rees-Mogg predict that the rise of the information economy will drastically weaken the nation-state, empower individuals, and shift power toward those who can operate beyond traditional jurisdictional bounds. In 2025, we could possibly be seeing many of those conditions coming into sharper relief: digital currencies, blockchain, and pervasive internet connectivity are enabling economic activity that transcends borders, making traditional state control and tax mechanisms increasingly brittle.
Simultaneously, geopolitical fragmentation and rising trade protectionism mirror the book’s forecast of a world splintering into more transactional, fluid alliances rather than rigid national blocs. As global trade frictions escalate, countries are increasingly prioritising technological sovereignty, reshoring critical infrastructure, and decoupling from adversarial powers, trends that undermine universal global governance and align with the book’s thesis that centralised state power may erode.
The rise of digital and corporate “sovereigns”, such as tech platforms, AI giants, crypto-native communities, further echoes the emergence of a “cognitive elite” who live and operate in cyberspace rather than within territorial states. The vision is that these entities increasingly wield powerful economic and informational heft that can rival state authority, underscoring a shift from territorial sovereignty to networked, decentralised power.
The acceleration of digital financial tools, especially in Latin America and parts of Africa and Asia, demonstrates how individuals are carving out greater autonomy from traditional financial systems. Whether through stablecoins, cross-border Bitcoin adoption, or decentralised identity infrastructure, people are increasingly able to exert economic self-determination outside of state-monopolised institutions. That trajectory reflects The Sovereign Individual’s core argument, that technology is reshaping sovereignty itself, shifting it from the state to the individual.
Have Cryptocurrencies and Digital Assets Fulfilled Milton Friedman’s Prediction?
Milton Friedman famously predicted in the late 1990s that the internet would inevitably give rise to a digital form of money, a “currency of the internet”, that governments would struggle to control. Cryptocurrencies, led by Bitcoin, have become the realisation of that vision. Built on decentralised, peer-to-peer networks, they allow individuals to transact globally without relying on banks, central authorities, or traditional payment infrastructure. This design makes them resistant to censorship, capital controls, and monetary debasement, aligning closely with Friedman’s insight that such a system would eventually emerge beyond the reach of the state.
The resilience of cryptocurrencies has been proven in real-world contexts. For example, in countries like Argentina, Turkey, and Nigeria, where inflation and currency restrictions have eroded public trust in national money, Bitcoin and stablecoins have provided citizens with a reliable means of storing value and transacting across borders. Even in regimes where governments attempt to restrict access to crypto exchanges, peer-to-peer marketplaces, and decentralised platforms continue to thrive, highlighting the difficulty states face in suppressing an open, borderless monetary network. These dynamics illustrate Friedman’s point, that once a tool for unmediated exchange exists online, it becomes nearly impossible to eradicate.
Beyond serving as money, digital assets are enabling the emergence of the “sovereign individual”, individuals and communities who can operate more independently of state structures. Decentralised Finance (DeFi) protocols give users access to lending, borrowing, and savings opportunities without banks, while decentralised identity solutions and DAOs (Decentralised Autonomous Organisations) provide governance and collaboration models not tied to geography. In El Salvador, Bitcoin was even adopted as legal tender for several years before IMF pressure led to an amendment of the law in January. El Salvador’s example does a great job of showcasing how crypto can reshape the relationship between the individual, the market, and the state. These examples show how digital assets empower people to claim financial and political autonomy, bypassing traditional gatekeepers.
The trajectory suggests a broader philosophical shift, sovereignty is no longer exclusively a function of statehood but is becoming a property that individuals can exercise through technology. With cryptocurrencies, people can safeguard their wealth outside fragile banking systems, coordinate across borders without centralised oversight, and preserve privacy in an era of expanding surveillance. While challenges remain, from regulatory pushback to technological hurdles, the momentum of cryptocurrencies demonstrates that Friedman’s prediction has not only materialised but is actively reshaping society. They are laying the groundwork for a world where the individual, not the state, increasingly determines the terms of participation in the global economy.
Are We Witnessing the Shift to A More Sovereign Future?
In The Sovereign Individual, Davidson and Rees-Mogg envisioned a future where states would be forced to adapt to the rise of digital economies and the increasing autonomy of individuals operating outside traditional borders. Recent developments in cryptocurrency regulation and adoption show this process unfolding. Governments that once sought to ban or heavily restrict Bitcoin are now moving toward frameworks that legitimise its use, ranging from exchange-traded funds in the United States to the recent passage of the Genius act. This shift marks a recognition that, rather than eliminating decentralised money, states must find ways to coexist with it, a reality that mirrors the book’s forecast of governments competing for relevance in a world where financial sovereignty is harder to contain.
The state adoption of cryptocurrencies introduces paradoxes that The Sovereign Individual anticipated. On the one hand, regulation and integration into financial systems bring new legitimacy and wider adoption, especially among institutions that were once cautious. On the other hand, by embracing Bitcoin, states inadvertently empower individuals to store and transfer wealth outside the control of central banks or fiat systems. This creates tension: while regulators frame policies as safeguards for investors and markets, the very existence of state-endorsed crypto infrastructure makes it easier for citizens to access money that resists devaluation, censorship, or seizure.
If this regulatory momentum continues, the impact could be profound. In emerging markets with histories of currency crises, formal acceptance of Bitcoin or stablecoins could accelerate the disintermediation of weak financial systems, shifting economic activity into parallel digital economies. In developed markets, institutional adoption could normalise crypto as a standard portfolio allocation, further weakening the monopoly of state-issued currencies over long-term savings. As more governments participate, competition between jurisdictions could intensify, with crypto-friendly states attracting talent, capital, and innovation at the expense of slower-moving rivals. This echoes The Sovereign Individual’s vision of a fractured geopolitical landscape where individuals and capital flow to the most accommodating environments.
Ultimately, regulatory acceptance and state adoption of cryptocurrencies may accelerate the broader transition toward individual sovereignty described in the book. If individuals can move wealth across borders seamlessly, participate in decentralised financial systems, and choose jurisdictions based on favourable treatment of digital assets, the traditional power of the nation-state is eroded. Governments will still wield significant influence, but their role may evolve into service providers competing for digital citizens, rather than unquestioned arbiters of economic life. In this sense, Bitcoin’s mainstream adoption is not just a financial story but a structural shift in how power, trust, and sovereignty are distributed in the 21st century.
