Last year at Money 2020 in Amsterdam I attended a super interesting discussion on the future of money with speakers from the Bank of England, The Swiss National Bank and the Bank of Canada.
I believe it was the gentleman from The Swiss National bank who volunteered some quite revealing thoughts on how central bankers see the threat of monetary competition by saying that they have to accept that competition in money is here and its only going
to intensify. As part of accepting this they then have to look at what role they play, he then stated that
"Central banks are service providers and money is the service that we provide."
As competition comes into money this will mean that central banks will have to improve their product.
This will be to the overall benefit of consumers. If consumers have a choice in using different types of money as a medium of exchange and as a store of value then the overall quality of the money in achieving these aims as a better medium of exchange and
a better store of value is only going to improve.
A lot of this change has come about because of bitcoin, but the money of the future could be very different to what we envisage today. We know about Facebook's plans with their so called "crypto currency" Libra, but we should see non fiat currencies gain
adoption such as Tally.
People talk about stable coins, but this seems to mean that its a cryptocurrency tethered somehow to a fiat currency such as the US dollar. Whereas Tally is actually giving the user the direct ownership of a unit of gold.
There is talk of a number of other private companies researching the issuing their own currencies along the lines of Facebook, but they would certainly be proceeding with caution as more and more central banks start pouring water on Facebook's Libra.
The French finance minister, Bruno La Maire, recently affirmed in a joint statement from the French and German government that "no private entity can claim monetary power, which is inherent to the sovereignty of nations".
Central banks globally have mismanaged their currencies, which is exactly why we need competition in money. We are at the early stages of this shift towards the decentralisation of the issuance of money which will be a bumpy road, but ultimately will result
in a fairer economic system.