Maarten de Borst predicts that money and payments will look completely different.
Will everyone pay for their groceries in bitcoin and ether in ten years? No, says Maarten de Borst, finance specialist in cryptocurrencies and blockchain technology. ‘Then the dollar and the euro are still there. But central banks are working hard on the digital euro and the digital dollar. “
In February, De Borst wrote the book ‘Building digital trust’ together with financial consultant Marijn Romme. In addition, he is a teacher on the course The future of money† “Learn about it, because everyone will notice something about this,” he says. “Everywhere, chair legs are being sawn by financial parties such as banks and insurance companies. Not only because of the advent of cryptocurrencies but also of fintechs. Many payment options have not been invented by banks, but are being established. It’s an interesting time for economics. “
Money is undergoing major changes in four areas, De Borst predicts. The money of the future is digital, decentralized, democratic and diffuse. “Digitization of money focuses mainly on cryptocurrencies and blockchain. However, these are technologies. Digital money is nothing more than a secure computer code that you send from A to B and which we have come to qualify as money. You can send a few billion to the other side of the world and it’s done in minutes at minimal cost. If you pay such amounts through the Swift payment system, it will take days. Therefore, central banks will also have a digital version of their own currency, because it makes payment transactions more efficient. ”
According to De Borst, the decentralization of money means that individuals can spend money themselves. Bitcoin is the good example of a private currency, but there are several. “They are borderless, no longer bound by the national borders of nation states,” says De Borst. “Money also becomes democratic because it is made by and for the public without any government being involved. But central banks also issue their own currencies, which they can supervise. That way, you get different types of money to choose from. ”
And as the fourth point of change, money becomes much more diffuse, De Borst continues. “The amount and number of transactions with digital money explodes and creates an infinite number of cryptocurrencies. It also makes it complex, because where does the money come from, what is it worth? Certain cryptocurrencies will take over over time, it will all sit on.”
When will cryptocurrencies become mainstream?
For example, it seems that cryptocurrencies will soon take over the money traffic. However, it is not that far yet, says De Borst. “Cryptos also have disadvantages. If you lose a code, you lose your money. It is not registered, so you can not prove that it is yours. This makes it difficult to process in the books. Under what heading do you post cryptos in the financial statements? , if they are not registered? ”
At the moment, cryptocurrencies are not real money yet, De Borst argues. “They will be the first if people also start using it as a means of payment, but then it must first be better than the alternative. As long as only a handful of nerds pay with crypto, there is nothing to worry about and the financial regulators do not bother. “
That changed when Facebook came up with Libra, its own cryptocurrency. “With 2.8 billion people, Facebook has the size to make it a global means of payment,” says De Borst. “The criticism was that with such a current coin one can effortlessly send a few million to terrorists without anyone noticing.”
“The churches, however, want to retain control of the digital payment traffic. Had Facebook followed, the FBI would have been right outside the door in no time to check the books to see if everything was going according to the rules. Big tech companies do not want it, they will not win against the regulators. Facebook has therefore already sold its digital currency. ”
Risks of cryptocurrencies
For now, many people find the cryptocurrencies a little intimidating because they are surrounded by so much uncertainty. But mistrust is not necessary, says De Borst. “All payments in bitcoins can be checked in a digital ledger, where 750 million transactions dating back to 2009 are stored. Criminals also encounter this. When a hacked oil pipeline was released last year after paying $ 2 million in bitcoin, the server from which the wallets originated was obsolete within two weeks. The payment system is so transparent that the entire payment system can be controlled. ”
Eventually, cryptocurrencies could become a game changer in the international money world, De Borst expects. “They reduce the international role of the dollar. The dollar could become a world currency because all international loans after World War II were in dollars. Over time, each country had dollar debt. Many countries have become dependent on US monetary policy. However, cryptocurrencies can make countries less dependent on the dollar. For example, El Salvador has started using bitcoin as an official means of payment. “
But any progress that solves a problem creates new problems, concludes De Borst. “Payment services are becoming more efficient and transparent, but fraud detection is actually becoming more complex. Bitcoins are not registered, so it is unknown who is behind digital transactions. NFTs, digital deeds on blockchain, are now also used for money laundering “If you think we are approaching the climax of all the changes around money, you are wrong. We have only just begun.”