SIBOS: DISCOVER “What are the other new characteristics which are divergent from the two of exchange and entity?” continues Fish. “Can money become something else? What if money has a new third characteristic which is its future?” In academic circles, this is known as the third variable. The thinking behind the third variable is uncovering things that don’t necessarily belong together but can exert influence. Fish has identified three options for new characteristics that need to be unpacked: responsibility and accountability, humanity and programmable money (see box, p57). The future of money is, he believes, more exchange (think Bitcoin) and more entity (think a distributed ledger technology (DLT) crypto linked to FIAT), but it’s also importantly about adding these new characteristics into the mix.
Divided demographics? Scarlett Sieber, managing director and chief strategy and innovation officer at CCG Catalyst, will be joining Fish on the panel. Sieber puts more emphasis on exchange than entity. She thinks that the younger generation, in particular, is moving away from viewing money as a tangible object and seeing it as a more abstract idea that ebbs and flows as money flows in and out of their accounts. And they want advice and context around their past and future purchases. “Cash use is certainly declining – the number of ATMs in the world decreased for the first time ever in 2018 – but it depends on the geography and users’ behaviour,” says Sieber. “In Norway, for example, the entire country is essentially cashless, whereas in the heart of New York City, I recently ate at a ramen place that only accepted cash.” Another panellist – Dr Leda Glyptis, chief of staff of 11:FS and CEO of 11:FS Foundry – has a similar view. “I’m a big believer that we will be seeing cash less and less in the future, with wearables, mobile and contactless payments, and digital cash, taking centre stage,” she says. “This is hardly a prediction, it’s already a global trend with
TheFintechMagazine | Issue 13
Cash use is declining – the number of ATMs in the world decreased for the first time in 2018 – but it depends on geography and users’ behaviour SCARLETT SIEBER infrastructure being developed and refined to support real-time global payments, clearance and settlement – crossborder and calendar-defying. The main drivers are regulatory frameworks, ease of use and traceability and we will see more and more innovation in this space as the art of the possible is taking hold. “In general, younger customers favour cards and mobile for payments,” adds Sieber. “Whatever currency is easily
accessible via mobile devices will be the one that many will choose. Outside of that, cash will always have a use for purchases where privacy is at a premium. We see this in the US with the quasi-legal status of cannabis as an example. Consumers are wary of using cards for the purchase of something that’s legal in one jurisdiction but illegal in another. And many disenfranchised consumers are forced to use cash because they are paid that way, and may lack accounts to safely store their funds and access it in another form.”
The role of crypto When it comes to crypto, Sieber thinks it’s early days in terms of mainstream use. “Interest in cryptocurrency closely follows the fortunes of Bitcoin. Right now, Bitcoin is up from where it has been for several years, so interest is high. But crypto is viewed as an investment, and is still complex to use at the point of sale, as well as risky – Bitcoin may experience a price jump, so the cost of your coffee could triple overnight!” She points out that banks are still slow to embrace cryptocurrency because its legal and regulatory status is less than certain. That said, investors are on board, and interest in crypto continues to broaden in the general population. So, banks will eventually follow, once there is more regulatory certainty around it. Glyptis also plays down the role of crypto in the short term: “Although I don’t think it will go away, I do expect to see digital cash becoming more prevalent than crypto as we move forward.” She sees London as the ideal place to discuss this future. “The fact that we are in London this year will undeniably have an impact on the energy in the room,” she says. “Not only is London the home turf of most of the incumbents attending Sibos, but it’s the global capital of fintech. It’s not just the level of creativity and innovation that calls London home, but also the fact that London’s ecosystem has achieved a higher degree of maturity by virtue of having been going longer. The learnings and insights should be valuable for the entire community.” www.fintech.finance
Fintech Finance presents: The Fintech Magazine Issue 13