The Future of Money Isn’t What It Used To Be

Central Bank Digital Currencies (CBDC’s) and The Future of Money

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“There comes a point where we need to stop just pulling people out of the river. We need to go upstream and find out why they’re falling in” — Bishop Desmond Tutu

As the essay below will reveal, the story of Central Bank Digital Currencies (CBDC’s) is a very interesting and multi-layered story. It is a story of traditional banking vs. Big Tech vs. Fintech, of the Remnimbi vs. US Dollar vs. the Euro, of tokens vs. regular digital money and ultimately of the future of the payments and financial services industry. Of course, all games don’t have to be zero sum games. Although this essay aims to provide a basic understanding of CBDC’s, it barely scratches the surface. I can assure my readers of one thing — the story of CBDCs is a treat for financial technology storytellers and futurists.

In fact the IMF, in a working paper on legal aspects of CBDC’s states ‘As often highlighted by central banks and other policymakers, the introduction of CBDC would raise important legal questions. Some of these touch upon the very fundamental relationship between money, the State, and the law’

Therefore, the story of CBDC’s is the stuff of legends for truly interested readers. I hope you enjoy this essay keeping in mind there is nothing more intriguing than the first few chapters of a story. A story of an imperfect and incomplete human endeavor with surprises at every turn primarily for the players involved.

The Backdrop

Before I attempt to demystify Central Bank Digital Currencies (CBDC), I want to start this essay with three key points that will offer very good context: the meaning of money, a prediction about the future of money and key events from the history of money that have led central banks to consider issuing digital currencies.

First, let us understand what the word ‘money’ means? Money is a current medium of exchange in the form of coins and banknotes; coins and banknotes collectively. The word ‘money’ is derived from Old French moneie, from Latin moneta ‘mint, money’, originally a…