The Future of Money: 20 Predictions

Will bitcoin kill the U.S. dollar? Will money become tokenized? How do we use cash?

Since we don’t have a crystal ball, we reached out to some of the brightest minds in crypto to share their predictions on “the future of money.” It’s a dead-simple question. The prompt was open-ended, allowing them to interpret the question in any way they see fit … and the results are fascinating.

Contradictions abound. Some are hopeful, some are sinister, some are bullish on crypto, some are skeptical and some envision a world very different from today.

Just a hint of the possible futures: Balaji Srinivasan foresees a “DeFi matrix” that will ultimately be “a check on the power of central bank currencies.”

This article is part of Future of Money Week, a series exploring the varied (and sometimes weird) ways value will move in the future.

Others see a world that is fully tokenized, or as Arca’s Jeff Dorman predicts, “every company in the world will have a token in its capital structure.” Bitcoin maximalist Erik Voorhees suspects that fiat currencies will “self-immolate.” And, in perhaps a chilling vision, central banker Marcelo Prates imagines a future currency “issued by a group of six big tech firms known as the ‘six sisters,’ and this currency gobbles up the world.”

There’s only one thread that cuts through all 20 predictions: Whatever the future of money holds, it won’t be boring.

In the old days, countries whose currencies collapsed would dollarize – they’d import dollar bills and start using that as money. Ten years from now, that will be a relic. Countries will dollarize using permissionless stablecoins, and central banks around the world will ultimately fear crypto-dollarization as a check against runaway inflation.

-Haseeb Qureshi – managing partner, Dragonfly Capital

Crypto and the top fiat currencies continue to coexist. We might see a consolidation in smaller national currencies as people find it easier to access USD via public blockchains.

-Hasu – research collaborator, Paradigm

Digital objects are becoming as commonplace as emails, and programming literacy is akin to reading literacy. I expect in the coming years people will be creating hundreds of tokens a year, all of which will have price discovery, be tradable and have multiple financial attributes.

Similarly, being able to write, read and interact with smart contracts that make this possible will be a skill that increasingly more people have to participate in the economy. This means that money will become less abstract – some number in some box – and far more tied to our digital labor and self-expression.

-Lex Sokolin – head economist and co-head of DeFi/fintech, Consensys

The DeFi matrix may be to the 2020s what the social graph was to the 2010s. Once every asset can be represented in a digital wallet – bitcoin and ethereum, yes, but also CBDCs [central bank digital currencies], stocks, loans, bonds, etc. – all these billions of assets will trade against each other every second of every day around the world.

This table of pairwise trades is what I call the DeFi matrix. Some of the cells in the DeFi matrix, like BTC/USD, have tremendous liquidity across many order books. Others, like a recent NFT [non-fungible token] vs. a new token, may only have what an AMM [Automated Market Maker] can give them. But all financial markets can be reduced to sub-matrices of the DeFi matrix. The traditional stock market will be CBDCs vs crypto equities. The forex market will be CBDCs vs CBDCs. And the fiat/crypto markets will be BTC/USDC and the like.

-Balaji Srinivasan – investor, former chief technology officer of Coinbase and general partner at a16z

Srinivasan then elaborates on the implication of the DeFi matrix, which leads to our next prediction:

The DeFi matrix will be a check on the power of central bank digital currencies. Just as Google News made every local newspaper compete against every local newspaper, digital wallets will make every national digital currency compete against every other national digital currency – and every other asset, public and private.

Nations will only be able to mandate adoption within their borders, and even then people may only retain the minimum balance of a surveillance currency. They’ll use digital wallets to select assets with programmability, privacy, possibility of upside and predictable monetary policy over locked-down assets that promise none of these features. As such, we are entering an age of global monetary competition.

-Balaji Srinivasan

Programmable fiat monetary policy and CBDC will make arbitrary seizure and irrevocable confiscation within a few lines of codes.

-Dovey Wan, founder of Primitive Crypto

Her next prediction:

Mordor central banking system does not create wealth, only the perception of wealth. The “Great Concentration” of fiat wealth and “Great Redistribution” from fiat to crypto wealth are happening in parallel this decade.

-Dovey Wan

Today, it’s often said that money has three primary functions: a store of value, a medium of exchange and a unit of account. But more than that, money is often seen as a reflection of how much you are worth to this world and how much that coffee is worth to you. Money is value. But as I look around, I see the concepts of money and value becoming less and less intertwined.

-Taylor Monahan, founder and CEO, MyCrypto

Let me paint a picture that might or might not come to pass. You have a bunch of centralized services and islands connected by decentralized blockchain rails… I think a lot of services are going to need to still be isolated and centralized because that’s what’s most computationally efficient, but the network as a whole could be largely decentralized.

You can move between any service easily on standardized blockchain rails, which would be extremely valuable. If there’s an easy, standardized way, in 30 seconds, to move assets from one platform to another – that doesn’t exist outside of crypto right now, and it’s a huge hindrance.

Payments could be effectively instant on blockchain rails. This is true of money, and that’s true of assets as well – assets get tokenized … Payment apps and in-store objects support that, [and that’s] probably happening largely over mobile. I think that is something which would be in many ways more efficient, and easy to scale and grow, than the system we have today. I’d be pretty excited to see something like that.

-Sam Bankman-Fried, CEO, FTX

My prediction for the future of money is that it’s going to get a lot weirder. It will be more closely tied to, or allow a greater expression of, our identities and our individuality. It will reflect our relationships in both the physical and digital worlds.

It’s going to accelerate globalization in bringing together people with similar values across borders – and tying them together with financial incentives and an identity that is intensified and deepened with financial value involved. And all that is going to shake up the traditional world of governments, different legal jurisdictions and different local currencies.

-Laura Shin, host of “The Unchained” podcast.