The death of money, as you once knew it
I’ve been saying it for years: the use of cash is on its way out and the Coronavirus will be the final nail in its coffin. There’s no point in fighting against an inevitable phenomenon because the use of banknotes will more or less have disappeared from our intertwined economies – including China – within 10 years. However, the future isn’t just gloomy for fiduciary money: the same goes for the banking world that is destined to a sad fate, and decline. In fact, the banks will soon follow cash into the oblivion of finance, and it’s not the disastrous development of their stock market valuations that will contradict me. Let’s not even think about bringing up the closing of many branches by a multitude of banks across the globe, mounting redundancies to make way for digitalisation, and of course the negative interest rates that are dealing the final blow to the banks of old.
In short, the traditional bank and the bank account as we still know it today in 2020 will also have both disappeared by 2030. May those in doubt simply take a look at the dramatic capitalisations of Deutsche Bank or HSBC, and may they compare them to the digital platform of the future par excellence, Revolut, that is valued at nearly 6 billion dollars. I will let you crunch the numbers and compare, but I strongly urge you to be sitting down when you do…
The fact is that technological breakthroughs now mean that financial services are no longer exclusive to banks, and are not even favourable to maintaining the traditional banking system anymore. Central banks themselves, concerned with keeping their control over the monetary system, are attempting feverishly to launch their own digital currencies. Because the future of money will involve different and diverse applications that will be programmed in light of hyper-individualisation where consumer needs, their solvency and their savings will be integrated together. It’s the nature of money itself that is on the – imminent – verge of being turned on its head, shaken up and down and spun round and round because the term “money” will very soon be used to encompass all that is likely to be exchanged for whatever value…and even for no directly tangible or perceptible value. Otherwise, why do you think that Mark Zuckerberg has thrown himself into the release of Libra, that is intended to be traded on Facebook, WhatsApp and Instagram?
My prediction? That the money of tomorrow will not only serve to pay for your food and petrol, but it will also become a creature made-to-measure for these social media platforms – for many platforms – allowing users to make peer-to-peer transactions and interactions. It is here that lies the change, or rather the about-face of the paradigm: money is at present indissociable from technology. Money has become a form of Data, and this Data is forcing us to completely overhaul our understanding and our way of grasping money.
In doing so, another silent – and major – revolution is rearing its head beneath our very eyes and that we must imperatively take note of. One of the fundamental attributes of a government is to possess macroeconomic control of the area that it is responsible for and, to this end, its currency has until now of course been the ideal tool to exert and maintain its hold and influence. This is how taxes, denominated in the currency printed by the government, represent a formidable device to legitimise this money. A gigantic struggle, and of historic importance, is thus in store between the government, that will use all its strike force to preserve its privileges, and this new world that will only be able to prosper through absolute decentralisation.