Will digital money belong to democrats or despots?

Just as the internet disrupted media and the information ecosystem, innovations in financial technology (fintech) are disrupting another fundamental aspect of society: money. As societies move to modernize their financial systems, authoritarian governments, liberal democracies, and proponents of decentralized currencies have all proposed divergent visions for the future of money.

China, for example, is on its front foot, looking to leverage fintech to assert greater domestic control over capital and the economy, and disrupt the US-centered global financial system over the longer term.

The outcome of this monetary competition has geopolitical implications and significant societal risks. On one hand, digital currencies could reap the benefits of underpinning the financial system, extend services to the underbanked, and increase the efficiency and security of payments. But on the other hand, these technologies can also be used for state surveillance, to undermine critical financial institutions, and to evade sanctions and law enforcement.

COVID-19 shutdowns further accelerated a shift toward e-commerce and contactless payments, prioritizing digital representations of money over physical cash. As those digital representations start to dominate the economy, it raises two urgent questions: Is there still a need for physical cash? And what monetary system should replace or supplement it?

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Πηγή: atlanticcouncil.org

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