The future of money

How digital ecosystems are changing our understanding of value and trust

Ville Sointu discusses the future of money thumbnail

Imagine going to see your favorite band in concert and being able to choose to skip the line to scan your ticket.

As you approach the venue doors, barely noticeable biometric scanners identify you and access all your booking information and personal preferences.

As you walk to your seat, displays recommend merchandise that matches your personality – perhaps an exclusive VR recording of the concert to rewatch at home, or AR glasses that make the concert experience even more immersive. The displays direct you to where your friends are seated and give you the opportunity to upgrade to a VIP seat.

Meanwhile, your digital AI assistant preorders your preferred food and drink options so it’s waiting for you at the concession stand, just as you like it. It also reserves a seat for you and your friends on the train home at the end of the night so you can beat the crowds.

Now imagine paying for all this without having to scroll through apps on your smartphone. All the transactions happen automatically and predictably, and, most importantly, you completely trust the systems that make it all possible.

Money undoubtedly powers our world, but without trust in the financial system, money has no value. As we enter the next decade, digital banks, alternative ways of transacting, and innovative technologies such as biometrics, AI, and digital assistants will continue to transform money.

This will make societies and economies stronger, but maintaining trust in this digital environment becomes far more complex.

The future of money, therefore, must be built on a whole new level of trust.

Close-up of a human eye divided vertically between a real and a digital version, highlighting the importance of biometrics to the future of money.

What do we mean by the future of money?

Money is no longer just coins or notes. It’s a vast and expanding digital ecosystem. Transferring money while maintaining a high level of trust is perhaps the most mission-critical action of all, and so networks must support the growing digital “realm” of money.

Why is trust an important element to consider for the future of digital currency?

Without trust, money doesn’t hold value as people would lose faith in it. Outside of this, it’s important that there is trust in the security of the system too. Crucially, there must be trust in the networks over which transactions take place.

How will we reach this new future of money?

Money is a technology, and as with any technology, evolution takes time. So, there are no shortcuts – dedication, innovative thinking and patience from industry players will ensure that the future of mobile financial services will be safe and secure for all.

What creates value?

One way to understand value is through the intersection of three components: trust, individuals and consensus. In today’s complex digital landscape, each component presents its own set of unique challenges.

Trust

is the cornerstone of all value exchange and functional societies.

When everyone knows everyone in a small community, maintaining a collective understanding of value and its exchange is easy. When communities grow into societies with universally connected digital ecosystems, maintaining trust becomes complex.

Individuals

that can be identified as unique players in a network, community or society are the atomic components of trust.

The more individuals, the more complex it is to maintain trust. In connected systems with remote interaction, identifying individuals in a commonly recognized way becomes mandatory. This is why we have varying levels of digital identity systems in place today.

Consensus

among individuals defines the mechanisms needed to establish a framework that makes it possible to interact with value.

Today, consensus is defined by a legal and governing system that gives credibility through enforcement. Fundamentally, consensus is always based on society-level agreements over how to ensure trust with individuals or organizations without needing to have a personal relationship with everyone.

One well-known example of how these components create value comes from India. The India Stack – a comprehensive digital identity, payment and data-management system – is making it possible to make transactions effortlessly in real time.

This system has accelerated the country’s shift toward digital payments, driving economic development and helping those in rural areas to stabilize their income. An angler in Karnataka, for example, can now better financially prepare for the annual fishing ban during monsoon season. With just a smartphone, they can accept payments, easily settle overdue invoices, and receive financial support if needed from family members anywhere in the country.

In this ecosystem, trust between individuals is achieved through consensus that the government's digital identity and payment infrastructure comply with the legal and regulatory frameworks that define it.

But beyond the India Stack, is this pattern visible elsewhere today?

What is the core challenge that money addresses?

The narrative around future currency is often driven by current technology hype, but let’s examine the core problem we’re trying to solve.

Diagram of transparent pentagons stacked on top of each other, representing the important attributes of future currency

Fundamentally, money is about providing societies with the technology to store and spend future value without having to rely on bartering.

The obvious attributes of money that we can agree are beneficial include:

interoperability
instant transfer of value
common agreement of its value
transaction privacy relative to the context where the exchange is done
accessibility (that builds on scale and inclusion)

These attributes have evolved dramatically as we’ve moved away from physical cash. Cash historically addressed these requirements extremely well, but as we’ve become more distributed as a society, things have gotten more complicated.

Replicating a cash-like instrument in an online environment – while possible – is perhaps not a system we should want.

It is the physical proximity requirement of cash that keeps the current system in check to the extent it is today. Financial crime, in its current form, is already a rampant problem which today’s system is trying to combat. Introducing an unlimited, anonymous digital cash equivalent would empower bad actors to scale their operations with less-than desirable goals and unprecedented speed.

Unsupervised and decentralized systems like Bitcoin have tried to fill this gap, but as they hold no significant real-world value, they’ve been somewhat irrelevant in the conversation on the future of digital currency. Even in El Salvador, which made Bitcoin legal tender in 2021, all value transactions are still measured in US dollars and other government-issued currencies, as that is the value individuals have agreed is sufficiently meaningful, stable and understandable.

The future of money cannot be solved by technology alone.

A city in India with beams of digital light shooting upwards to form a grid in the sky, showing how the future of mobile financial services will connect society

We need a practical consensus and trust on a global scale to get to a safe, fair and scalable system that functions predictably and complies with our common understanding of a trusted method of value exchange.

In the connected digital world, we expect to be able to transact safely from one place, wherever we are. This notion translates into one of the often-underestimated trends in financial technology: Embedded finance, where non-financial organizations can integrate financial products and services directly into their ecosystem via an API.

As financial distribution platforms change, the "winners” in this space will be those who have the most scalable, granular and easy-to-use methods of transacting with value.

The false promise of Web3

We can’t discuss the future of money without diving deeper into cryptocurrency, digital assets and Web3.

The first Bitcoin whitepaper published in 2008 promised a decentralized, electronic version of money. Trust would be handled by a mechanism, guaranteeing that no one can interfere with transfers. Individuals would not be recognized outside of the network. Consensus would be achieved by “proof of work”, where no one would need to trust anyone, just the mechanism.

The invention of a decentralized value exchange platform based on these principles has created a narrative that has caught on in the past decade. No one has escaped the hype we see in cryptocurrencies, decentralized finance and Web3 that is based on this still quite vague notion of decentralization.

Web3 is a term used to describe the new iteration of the internet and includes ideas such as decentralization, blockchain, digital scarcity and token-based economies. When it comes to future currency, Web3 claims to add digital ownership to the equation – but is that true?

For example, Web3 proponents promise that digital goods will become your property via mechanisms like non-fungible tokens (NFTs), but this is not entirely accurate. Digital assets are defined by the environments in which they are used.

A diagram of a baseball cap, illuminated unicorn hat and helmet lined up, showing digital goods that can be purchased with future currency

If you have a unicorn hat in League of Legends, it doesn’t mean it will be usable or even visible in another game.

This is because there is minimal incentive for game developers to expose their in-world economy to outsider control.

Essentially, all Web3 projects that promise tangible value are based on contracts, terms and conditions, with centralized service providers controlling the deliverable.

Web3 developers should comply with the same laws and regulations as any other supervised service providers when the activity dictates. The bare minimum for Web3 developers is to comply with the laws in countries where they want to offer their services. This is the only way to create the required trust for true ownership in the digital realm.

Electronic and mobile money is driving financial inclusion

Long before cryptocurrencies or Web3, the first large-scale deployment of a system that enabled the transaction of digital money by a non-bank service provider was in Africa. Starting in 2007, Kenya’s M-PESA successfully provided financial services to large parts of society without a full banking license.

M-PESA is a mobile phone-based service for money transfers, payments and micro-financing that provides individuals with a trusted and contactless way to pay bills, purchase essential items, send money to family, and receive vital government support payments.

In Pakistan, Telenor’s Easypaisa uses the Ericsson Wallet Platform as its API-first scalable core ledger. With over 14 million users, it has evolved into a fully licensed bank, allowing customers to access a digital bank account. The Ericsson Wallet Platform lets users store, transfer and withdraw money, pay merchants and utility providers, and benefit from basic insurance, micro loans and savings accounts with interest.

MTN, Africa's largest mobile network operator, has also introduced a fintech solution used in 17 markets and by over 63 million people built on the Ericsson Wallet Platform. The platform recently won a Glotel Award for Mobile Financial Service Mastery, recognizing MTN’s Mobile Money Open APIs.

In the program, MTN made its mobile money platform available to third parties, which provided developers and programmers complimentary access to the MTN Mobile Money proprietary software platform.

Financial inclusion, made possible by electronic and mobile money providers, has a direct impact towards achieving the UN’s Sustainable Development Goals including gender equality, economic growth, better infrastructure and the eradication of poverty.

Even with the programs above, around 2 billion people globally are still financially excluded or missing adequate access to financial services. Imagine what will be possible when it is less expensive to serve customers through lower upfront investments and individual risk can be reduced through prepaid dynamics. We’re gradually approaching this; however, today’s advanced financial systems are still not equipped to handle this sufficiently.

Today, over 300 million people worldwide use Ericsson technology to connect to the global financial system.

“We have created an inclusive ecosystem that is open for everyone to join to increase both the commercial and social benefits of mobile financial services.”

Cedric Nguessan, Executive-Group Fintech
Business Development, MTN

A closer look at India – a cashless future?

Moving away from physical cash and embracing mobile financial services has transformed the Indian economy in less than a decade – now the third-largest country when it comes to digital transactions. This has helped lower corruption, increase the number of taxpayers and improve the simplicity of business transactions.

With technologies such as AI/ML, financial decisions which previously took multiple days can now take place in a couple of hours.

Speaking to Praveen Kadle, Founder and Chairman at Prachetas Capital in Mumbai, he identified awareness as a key challenge to overcome when connecting every individual to the global, digital financial economy and ensuring trust and confidence in the future of mobile financial services. Once industries are all fully aware of the capabilities of these innovative new technologies, economies can thrive.

“The lives we’re living are going to completely change by 2030. I have a feeling that with this new mobile technology, you may see the Indian economy much bigger than USD 7.5 trillion by 2030. I wouldn’t be surprised if it almost touches USD 10 trillion by 2030.“

“I have a feeling that with this new mobile technology, you may see the Indian economy much bigger than USD 7.5 trillion by 2030.”

Praveen Kadle, Founder and Chairman,
Prachetas Capital, Mumbai

Foresight is 20/30

Even with its flaws, the financial system we have today is evolving faster than ever before. By 2030, we will see significant advances in digital identity, central bank digital currencies and embedded finance. In our day-to-day lives, this will translate to effortlessly accessing our money in a privacy-protected and secure way in every situation, both physically and digitally.

We will increasingly rely on biometrics and easy-to-control authorization mechanisms to ensure access to money is not dependent on any specific device or form factor. Imagine a prepaid car waiting to take you to the office every morning. As you step inside, invisible biometric scanners identify you and instruct the vehicle to play your favorite music and drive you to a nearby coffee shop to pick up a preordered latte.

Young woman on a bus looks at a virtual screen displaying purchase information and a map, highlighting the future of digital currency

The combination of ubiquitous digital money and advanced digital identity will enable legally valid contracts like house loans and investments with unprecedented efficiency and low friction.

AI-powered digital assistants will be able to order essential items like milk and cleaning products, or preorder train tickets. Given time, your digital assistant will understand your life so well that it will automatically re-negotiate and propose the best insurance, investment and utility contracts for you. These advancements in fintech solutions, however, will only be possible if the governments, businesses and individuals that need to adopt these systems perceive the networks that support them as being trustworthy.

As money has evolved over thousands of years and pushed our species forward in complex ways, we need to appreciate that this system won’t improve by demanding a revolution.

By leveraging technical achievements and constantly evolving regulation and private/public partnerships, we can automate consensus and trust between individuals, but only if we build it together with mechanisms that already work, like ecosystems powered by electronic and mobile money APIs, digital identity and cryptography.

In a truly connected society, every individual will have the choice to be part of a trusted digital financial system that is easily understandable, always accessible, democratic and transparent.

What do you think it will mean for society and innovation if every individual is connected to the global digital economy, and what might your future of money look like?