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#innotribe: the future of money

Now I know where all the people are … they’re in the
conference!

Future money

I just opened the innotribe conference stream with Udayan
Goyal
, Founder and Managing Director of Anthemis Group, talking about the
future of money with guest panellists:

And we had a sellout room with standing room only.

Future money1

Brilliant!

So what is the future of money?

Well, we didn’t know quite how to run this session, as a similarly
themed session ran last year and we didn’t want to just repeat it, so we
decided to mix it up by asking whether we really need our core infrastructures
for processing money, such as SWIFT.

A radical thing to do at SIBOS and, unsurprisingly, the
answer was overwhelmingly yes, we do need them … but not in the same way.

The set up for the talk was to compare the banking industry with
trains.

To run trains you need tracks and the tracks of our fears
are how things have changed.

For example, we are seeing new models of value exchange in
the form of mobile and internet exchanges person-to-person, and we are also
seeing new operators who could disrupt traditional operations, such as the
China National Advanced Payments System (CNAPS) and mobile carriers like
Vodafone with M-PESA.

Throughout the session we had audience dialogue about these developments
alongside our panellists views of the future.

The key lessons and walkaways is that the future is very
much going to need the tracks that are laid by the industry, but the trains,
the train operators and the passengers will change.

In fact, they already are, and this was illustrated well by
eToro, Webisteme and Currency Cloud.

Futuremoney2

Chatting with Yoni Assia of Etoro and Eli Gothill from Webisteme

All three firms made clear that you can trade, exchange and
process without a bank involved, but that you need the rails to run.

Having said that, eToro’s founder Yoni wanted to see an intergalactic
currency.

We couldn’t deliver that, but we could deliver an
alternative to railways: roads.

When roads and the automobile (auto-mobile?) appeared, everyone
thought the rails and railroads would disappear.

They didn’t, but they adapted.

Like roads, which offered individuals the ability to get
point-to-point direct without having to wait for operators’ interventions, the
mobile is offering individuals the ability to transact person-to-person without
the financial systems intervention.

That’s what Bitcoin is doing.

Futuremoney3

But it goes way beyond this, in that the mobile does not get
rid of the banking systems, just as the car does not get rid of the railways
systems.

You need both but just for different reasons.

And that’s a really good way to end our analogy, as the
banking system is a railroad with trains but the exchange of value could equally
run on a freeway with other vehicles.

Both railroads and freeways however are highly regulated for
health and safety, as that’s where there is massive risk to the economy, so
whoever runs our railroads or creates our freeways in value exchange will equally
fall under governmental control.

Not much changes in the future from a structural view
therefore, but from an operational view we can see and are seeing radical
change.

Whatever happens, it certainly had people thinking.

People think

Watch that space.

Ah well, now off to enjoy O-Sake, sorry Osaka .. back
tomorrow.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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3 comments

  1. Always good to see what people believe the future will bring.

  2. I am looking forward to reading what you think of the concepts being presented by one of the Innotribe finalists, P2P Cash. The upshot: Bankcards needed bankerly cooperation and uniform technological standards to explode merchant and consumer acceptance. Is not the same true for mobile money transfers? The industry needs to cooperate on the exchange while competing on product and service.

  3. Great post ! I wanted to clarify my analogy to the intergalactic transporter :)
    I believe p2p technology, like bitcoin, enables the transfer of exchange between people frictionless and in the speed of light.
    while I think the roads analogy is great to illustrate the p2p decentralized form of p2p, cars are still slower than trains, where today the “banking trains” are at T+3 (yes most wis take 3 days!) and p2p is real time. So in that comparison you could say that p2p digital exchange is more like a Startrek intergalactic transporter compared to today’s trains .

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