Constructing the Future of Money

The articles in this issue of FinTech Rising showcase two paths to instant payments and their progress: the traditional bank-centric approach and the emerging decentralized digital-cash approach. Our articles come from the Federal Reserve Bank of Chicago Payments Symposium, held virtually on Sept. 22-23.

They are not incompatible, and they will co-exist, certainly internationally and likely within any single country. In fact, they already do when you consider how bitcoin, for instance, is used as a means of transmitting money instantly.

Leading development in bank-centric digital cash is the People’s Bank of China (PBOC) and its E-RMB digital wallet. It would be the first central-bank digital currency in widespread use – it’s undergoing retail tests with Chinese ride-hailing services, for instance – and it would “offer the authorities a degree of control and oversight never thought possible with physical money,” as Shanghai-based investor and commentator John Browning writes.

He is not the only one to suggest that the broader aim could be an alternative international currency system using the based on the closed-loop E-RMB as an international, instant payments rail. It’s seen as a potentially useful and easily accessible alternative to the USD reserve currency. PBOC has all but said that, according to Coindesk coverage.

All that from a centrally controlled digital asset on a mobile wallet, without the need for a bank account. The future of money is pretty much now. As the symposium panel on Digital Currency, the new goal is to be part of an instant commerce environment, not an instant payments environment.