Hard cash gives way to digital credit

Peter Madden tracks our future transactions

In a couple of decades' time, money as we know it may no longer exist. Banks and bills could be a distant memory; national currencies may no longer hold sway; and bartering – of products, services and time – may be back in fashion.

Hard cash is already giving way to digital credit. One sure sign is the steady closure of bank branches on our high streets. Pop into a pub for a pint these days, and you'll find another: regulars flashing credit cards, not tenners, at the busy bar staff. Meanwhile in Japan, you only have to wave your mobile at a vending machine to get your favourite can of fizz.

Digital payment systems might start to pawn virtual currencies, independent of dollars, euros or pounds. The seeds are already being sewn. Who needs cash when you can spend credits from cyber schemes like Beenz and I-points, use your air miles, or trade in your loyalty bonuses? Just how long before Amex or eBay issue their own currencies?

We are already seeing a boom in bartering, thanks to peer-to-peer sites like Swaptree, where you can exchange books and CDs, and Swop2Shop for clothes.

So what does virtual money mean for sustainability? Will it pave the way for more local currencies – taking the lead from towns like Totnes? Will it loosen up some liquid for credit-crunched companies? Or will the exchange of old wares and private services wean us off our love of shopping?

These new transaction trends could prove impossible to regulate, their future dependent on our readiness to take a leap of faith. But given the behaviour of major financial players over recent years – and their seeming inability to learn from mistakes – people may well opt to place their trust in other forms of exchange.

- Peter Madden is CEO, Forum for the Future

Image credits: Thecreativeeyes / istock