What is “the future of money?”

So many wise words and wisdom's have been shared and debated on the topic of the future of money, along with numerous books and research papers on the same topic. I have reviewed much of what has been said over the past few years and surely the first question is. “Is there anything new to say?”

Whilst walking recently with a good friend Celia Gates we explored the question using her Whether Forecasting model and here is some fresh thinking.

“The future of money”; is the wrong question!

Money was and remains amongst other things a method of exchange. If money had stayed as only a mechanism of exchange; kind of like what we created it for, we would not be where we are today with the economy we have and the freedoms we enjoy. Money had to and has become an object or an entity . An entity is a thing with distinct and independent existence. Money exists for money itself, it creates itself, it has value in of itself. Money is therefore both an exchange and is something in its own right. Money makes itself. This is well know. “Money,” much like love is transactional. It is an exchange between entities in recognition of shared values rather than an entity in its own right. It is the essence of an exchange — the transaction. Without this connection money or love have no value. The coins jiggling in the pocket of the person crossing the dessert are worthless to him unless he can exchange them with someone for water. Money requires exchange for its value to be asserted. In isolation, despite accumulation, it serves no worth. So far good context

  • Exploring, which many have, what money looks like in the future if it was just an exchange. The outcome is probably an anonymous ability to trade, barter without the need to associate FIAT; might look like the best of BITCOIN !

  • Exploring what money looks like if just an entity. The outcome is probably a DLT crypto linked to FIAT, assuming that the cost of servicing was less than a central system, can scale and is more effective, efficient. The best of crypto.

So why is debating money so difficult when we explore both of these characteristics of exchange and entity? As when taken together they appear to have divergent paths but leading to a similar answer assuming you look thought the eys of tech, but this is not “the future of money.”

The question we should be asking is “what are the new characteristics of money, which are divergent from the two of exchange and entity” 

Can money become something else? What if money has new characteristics which are its future? In short, the question “the future of money” surely should be “what are the new characteristics of money ?”

Today we have: exchange (gift, fair, profit) and entity (interest and tax).
Here are three contenders for new characteristics that need to be unpacked.

  • Responsibility and accountability. New Money comes with being accountable, traceable and trackable. This may be the counter to consumerism, throw away and disposable. We need to think sustainability. No longer can you, as a person or corporate, abdicate responsibility for the actions of your money.
  • More humanity. The exchange you make using money becomes data and data over time enables insights and insights become knowledge and from knowledge comes wisdom. The owners of the data (eventual wisdom) will know lots about you and me and so will we demand that these data “owners” (controllers, collectors) have a duty of care to us. Knowing something about me and doing nothing will not be an option. Money, which is data, means that the data owners will have a duty of care to be human and treat us with humanity. Imagine your provider knows something about you and does not act. New Money brings about more humanity.
  • Programmable money. Money can come with terms and execution. Trust in the institutions can go as the money itself becomes the code, process and execution. Programmable money that incentivises “good” behaviour… or bad.
The future of money is more exchange and more entity but it is importantly about adding the new characteristics such as responsibility/ accountability, humanity and programmability. Money is entering a new age.