Borderless currency is the future: are tech giants key to adoption?
We are moving towards a future of de-nationalised money, with tech giants leading the way. The endpoint will surely be a range of borderless currencies that trade against each other on the open market, with demand determined by fitness and use case.
Facebook, Signal and Telegram are developing their own digital coins. So is JP Morgan, which recently announced JPM Coin with enormous fanfare and to an underwhelming response (it is, essentially, Tether for participating banks). And you can bet your bottom JPM Coin there will be more – well, you could if JPM Coin was designed to be used by individuals.
While details about the social networks’ coin projects are sparse, it’s a fair assumption that they’ll be forms of stablecoin, designed to allow users to store and transfer value frictionlessly across borders, and throughout the vast, billions-strong ecosystems these corporations enjoy. The US dollar might be the world’s reserve currency, but there are fewer than 330 million Americans. Facebook has over 2.3 billion active monthly users, not far off the population of India and China combined. That’s a big market.
Of course, fiat money isn’t going away. And neither is regular crypto: that much should be clear by now. Bitcoin is sticking around, and however cryptos reshuffle themselves, the idea of decentralised money is going to last the distance.
And so this is what the future is starting to look like: a world of many borderless currencies. Currencies will compete on the open market, and be bought and used according to utility and use case. Want to pay your taxes to Uncle Sam? You’ll be needing good old-fashioned American USD. Want to flick some cash to your kids on their gap year over in Australia? You’re both on Facebook, so that’s probably the easiest way to do it. Worried about the way the global economy is looking? Consolidate some of your holdings into BTC and digital gold.
Austrian economist Friedrich Hayek envisioned something similar way back in 1976, in his book The Denationalisation of Money. Currencies would, he said, be adopted on merit, rather than being issued by states to their citizens. Forms of money that proved too inflationary, or deflationary, or volatile, for their users’ needs would be passed over for better forms of cash. The free market would decide what deserved to survive.