In his recent book Before Babylon, Beyond Bitcoin, the writer and thinker Dave Birch turned his attention to the question of money. In future, he asked, who will control it? Traditionally, the value of money has been guaranteed in some form or other by government, historically using large reserves of centrally-held gold. We don’t use gold in that way any more: instead, the productive capacity and economic standing of a nation props up its currency.
But, in Birch’s view, the future of payments will be somewhat different. Money’s centralised character will eventually fall away, and monetary control will flow from governments to other institutions. When you look at what’s happening now, he might have a point.
One way of looking at it is to consider, say, the London Oyster card system, where millions of people have a card that contains a certain pre-paid value, which they use to access services in London’s transport system. Once it is charged, an Oyster card has a value that is insulated from the fluctuations of the financial and economic conditions above ground.
But it’s not the most radical departure. Bitcoin is a whole other leap forward, and in her column Ruth Jackson explains how, if you want to take the risk, it can be bought and sold. But is Bitcoin really a currency—is it money? There are plenty of regulators who’ve decided that no, it isn’t and who’ve classified it as a commodity instead. That hasn’t stopped people from using it as a currency, but the wild fluctuations of the value of Bitcoin—sharply upwards towards the end of last year, and then back down with a thump in early 2018—have made it a little unreliable.
Even so, in the last two years, a group of companies began offering customers credit cards designed specifically to let them spend cryptocurrency. The idea was to get Bitcoin out of the hard drive and onto the high street, and several companies forged agreements with Visa to issue pre-paid cards, which allowed people to spend Bitcoin or Etherium in shops.
It was an extraordinary moment. People were effectively given the chance to spend a new type of money that had no relation or attachment to the economic standing or conditions of the country.
However, it turned out that Bitcoin was not immune from all economic conditions, and the sudden slump in its value at the beginning of the year led to Visa suspending use of these crypto-cards, which they did on 5th January.
But there are other signs that the central, governmental hold over money might be loosened in other, more long-term ways.
It’s an unusual idea which is, at the same time, both very modern and quite old fashioned. The company offering this opportunity is called Glint and when you join, you get an app and a card. You load money onto the app which, if you want, you can then change into gold. This means you own a piece of a real gold bar, held in a vault, and when you spend money at the till, you can choose to pay in pounds, dollars, or part of that gold bar.
Sure, the price of the metal can fluctuate, but it’s nothing like as volatile as Bitcoin, which means the chances of a suspension of activity are very small. It also offers a pretty decent defence against inflation. In comparison to the crypto-cards, it looks a much more viable prospect.
It’s an intriguing thought: that money could slip the grasp of government and that currency systems themselves might end up being privatised. The result will be a huge degree of freedom. In future, the way you buy things might have less to do with national currencies and more to do with shopping around for the form of payment that suits you best.
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