When was the first time you've head about crypto-currencies? They are less than ten years old, an inevitable product of increasing digitalization.
The original Bitcoin has been joined by numerous others, copies, bitcoin cash, initial coin offerings, (ICOs), digital cash from high end respectable sources like Wells Fargo, decentralized e-currencies, even a sharia-compliant crypto-currency. And now Facebook, with a not quite consolidated consortium of thirty-odd unregulated FI services partners, is poised by 2020 to take Libra and its concomitant services to the millions for whom social media is the lynch-pin of their existence.
The future of each of these and the endless others spawning almost weekly must inevitably depend on their stability, security, transparency and user confidence generated by the qualities of the aforementioned.
What else is expected to happen with digital payment systems in the near future?
Investors are attracted by their high returns and by the speculative gains, even their ability to be exchanged for cash in some instances. Crypto-currencies certainly have been living up their reputation for volatility recently. Financial experts are concerned about the lack of transparency surrounding crypto-currencies which are not regulated by any institution, and which have, in some cases, resulted in scams. They are also concerned about the decentralized nature of the assets. ICOs released by FinTech companies are little more than a form of small investor crowd-funding and have been responsible for pushing the value of virtual currencies upwards.
The lack of regulation, the lack of central bank control, opens crypto-currencies to all sorts of potential moves to limit or control their activities, which, in turn, adds to their volatility, leading many experts to wonder if they can ever, truly, substitute for legal and regulated tender, digital or tangible, fiat as the banks call it. Central banks everywhere are naturally cautious. Digitalization of currency movement seems inevitable but are the banks ready to jump on that band-wagon? Ready or not, will they be forced to the band-wagon by market imperatives?
Despite skepticism, a number of central banks are looking at launching bank-issued, national digital currency. The Swedish Riksbank is currently exploring the idea, citing the decline in the use of actual cash. The UK., Canada and Israel are all investigating this potential next-stage development. An EU-Japan consortium, the Singapore and the Uruguayan central banks all have actual pilot projects. Some big banks, Wells Fargo, JPMorgan, BNP Paribas and others, have joined the movement with their own digital currencies. Part of them see some sort of collaboration as inevitable. For starters, the Bank of England has brought two cryptos under its wing and allowed them to open accounts.
Cryptos and financial services related to them are the direct product of digitalization. They are here to stay and their moment of going mainstream is about as imminent and as inevitable as the next technology improvement.
The cryptocurrency is not just a reflection of the technological advances of these times. It's a response to the necessities of the society we live in. It lets us deepen in the values that financial systems have, and it places the industry as Innovation leaders.
Changing the way of doing things, even for currencies, it's part of a social demand and we should be aligned with it when communicating.
Adopting the right technology to manage in real-time effective customer on-boarding, omnichannel cross-selling and personalized multi-channel marketing, supported by machine learning based marketing automation, seems to be the only way to keep ahead of whichever direction the industry is taking or will shortly take.