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The 2020s — When money went digital

We’ve been marching towards a digital society for several decades, and the 2020s will be remembered in history as the time when money went digital. This decade will encompass both technological innovation and behavioral change, and will complete our societal migration from a world built by physical labor to a world connected by digital devices.

The adoption of cashless payments has historically been driven by innovation in hardware and electronic payments. By nature, the growth of electronic payments devices contributes towards cashless transactions. The annual sales of wearable payments market devices was already forecasted to quadruple between 2018 and 2026, before the social construct of money itself became digitized with cryptocurrencies and central bank digital currencies.

While technological innovation will continue to drive more use cases for electronic payments, the 2020s will be unique in that we will also see the digitization of money as a social construct. The impact of this social change will be more prominently felt than the voluntary adoption of hardware technologies thus far. Until now, electronic payments had to be settled in offline ledgers and legacy interbank agreements. In the 2020s, blockchain technology will lead to the proliferation of central bank digital currencies and cryptocurrencies which are internet native.

By 2025, the IMF and the World Bank will be capable of facilitating CBDC transactions, and countries will begin phasing out physical cash and coins. This decade will also coincide with the coming of age for Gen Z, who will have grown up their entire lives knowing about the existence of Bitcoin. The presence of cryptocurrencies to Gen Z will be similar to the presence of the internet for Millennials — the technology was already here when they grew up. Globally, Gen Z is already the most populous generation, representing 32 percent of the global population. And money to this generation is digitally native.

Ultimately, the adoption of cashless societies will differ by regions. We will need to solve technology problems like high speed internet access in rural areas, and policy problems like digital privacy. Autocratic countries will want to mandate digital currencies as this empowers their surveillance capabilities. We will likely even see a black market for cash.

Digital money represents an opportunity for underdeveloped nations to leapfrog their current financial infrastructure. In particular, the future of grass roots digital currency adoption may come from African countries which have high internet penetration, a young population, and the greatest incentives to adopt newer alternatives. In the 2000s, countries like Nigeria bypassed the need to build a network of bank branches and skipped straight to mobile payments. We may see history repeating itself in the next decade.



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Technology, Media, and Crypto. I have some thoughts on a few things.