When considering the future of money, the real issue is the future of currency. Or perhaps the future of items of value which can be traded. Stocks and bonds can be traded on markets. Currency as we know it has been changing. This is nothing new; there was a time when charge cards and debit cards were unheard of.
Before we get to cryptocurrency, also known as digital money, let’s look at the evolution of currency and perceived value which may or may not have been clear or apparent as it has occurred right before your eyes.
Money – cash – was a primary and predominant form of exchange for goods and services. Same goes for checks. Almost everyone reading this can recall regularly receiving a check every week, every other week, or twice a month from their employer. 1974 began the practice of Direct Deposit. That meant no more paychecks from the employer, just a pay stub; the money went directly into the employee’s bank account. There were strings attached: all the employees had to use the same bank as the employer
Airline miles –accumulated, traded, awarded, sold by the airlines – this, too, is currency. Worth (value) changes as the airlines choose to modify per time of year and volume of traffic. This is a fluctuating currency, similar to markets where seasonal factors influence pricing. The amount of miles tradable for trips varies with time of year or status of cardholder or a myriad of other factors.
Prepaid store cards – aka stored value cards. As good for regular price as for sale price items. But there’s a catch: in some cases these cards lose their redemption value after a period of time.
Prepaid phone cards – Unlike “the phone company” those prepaid phone cards have volatile long distance, particularly international, pricing. There are trading exchanges on which arbitrage for the price of outbound minutes to every country changes countless times per day. These are reflected in the pricing of the phone cards, even sometimes after they have been purchased. Win-win to the merchant.
Prepaid cash cards – there are multiple uses for these cards. Parents use them for their childrens’ allowances, or to send “money” to their kids in college. This controls the money, and lessens the need for cash or a check. And further lessens the use of cash in everyday life, as these cards are widely accepted.
From New York City
Digital Strategy and the Future of Money
by Dean Landsman