This is an updated view on future of currency. Building on the new initial perspective authored by Patrick Teng, CEO of Six Capital, it includes insights from events in Asia and will be added to in Europe as we explore how currency is changing over the next decade.

1. The
Future
of
Currency
Insights
from
Discussions
Building
on
an
Ini4al
Perspec4ve
by
Patrick
Teng
|
CEO
|
Six
Capital

2. Context
This
ini4al
perspec4ve
on
the
Future
of
Currency
kicked
off
the
Future
Agenda
2.0
discussions.
This
updated
summary
includes
addi4ons
from
events
to
date
to
be
further
challenged,
built
upon
and
enhanced.
Ini4al
Perspec4ves
Global
Discussions
Insight
Synthesis
Sharing
Output

3. A
New
Order?
We
are
witnessing
the
transi4on
to
a
new
order:
New
na4onal
interests,
new
trading
routes,
new
products
/
services
are
all
emerging.
How
to
ensure
the
development
of
trade
in
this
environment
will
be
key
to
success.

4. Combining
Currencies
Doesn’t
Work
A
cri4cal
lesson
that
Europe
has
taught
Asia
is
that
combining
currencies
doesn’t
work.
Over
the
long
term
neither
do
currency
pegs…
Many
expect
that
the
next
decade
will
see
an
unraveling
of
the
European
model.

5. The
US
is
in
Flux
60%
of
the
world’s
output
is
linked
to
the
dollar.
It’s
easy
to
see
the
advantages
of
this
for
the
US
but
not
for
everyone
else:
The
system
does
not
include
a
guaranteed
lender
of
last
resort.

6. US
Global
Control
Some
countries
have
build
up
significant
dollar
reserves
but,
for
many,
the
cost
of
its
dominance
is
beginning
to
outweigh
the
benefits,
par4cularly
as
the
US
share
of
world
trade
and
GDP
is
in
decline.

7. New
Trading
Routes
The
next
decade
will
see
the
post-­‐war
routes
eclipsed
by
the
power
of
the
Indian
Ocean
region
with
new
port
construc4on
plus
proposed
railways
from
coast-­‐to-­‐coast
across
South
America
showing
the
shape
of
things
to
come.

8. Cross-­‐Border
Commerce
Cross-­‐border
commerce
is
growing
faster
than
domes4c
commerce
and
so
will
become
increasingly
important
and
influen4al.
Cross-­‐border
flow
of
goods,
services
and
finance
could
increase
threefold
to
$85
trillion
by
2025.

9. China
as
Asia’s
Voice
Despite
growth
of
other
ASEAN
na4ons,
for
the
next
decade
China
remains
the
clear
economic
leader
in
the
region
–
becoming
more
influen4al
as
the
primary
source
of
capital
and
the
voice
of
Asia
on
the
world
stage.

10. ShiHing
Power
and
Influence
The
centre
of
gravity
of
economic
power
con4nues
shi^ing
eastwards,
back
to
where
it
was
200
years
ago.
Recent
superpowers
seek
to
moderate
the
pace
of
change
but
the
reali4es
of
popula4on
and
resource
loca4ons
are
immoveable.

11. Sleeping
Eagle
-­‐
Waking
Dragon
China
uses
economic
might
and
so^
diplomacy
to
reshape
the
world
order,
usurp
the
dollar
and
dominate
world
trade.
As
a
result
migra4on
to
Asia
increases,
changing
established
market
places.
Africa
will
suffer
as
a
result.

12. China’s
Influence
is
Extending
China
is
opening
up
and
wants
the
natural
privileges
a
vast
economy
might
expect:
a
big
say
over
global
rules
of
finance
and
trade
and
a
widely
used
currency.

13. The
Start
of
Change
for
the
Yuan
Special
Drawing
Rights
(SDRs)
are
a
start
as
they
effec4vely
mean
official
recogni4on
by
the
IMF
that
the
Yuan
is
ac4ng
as
a
reserve
currency
despite
China’s
extensive
capital
controls.

14. Good
RegulaOon
is
Significant
–
for
Stability
and
Confidence
The
response
to
the
2008
crisis
has
not
had
the
desired
effect
-­‐
limi4ng
the
ac4vity
of
bankers
but
enabling
asset-­‐rich
investors,
sovereign
wealth
funds,
hedge
funds,
hungry
for
new
investments,
to
take
a
greater
share
of
the
pie.

15. Born
Free
Change
across
all
regions
is
inevitable:
The
emerging
markets,
free
of
constraint,
are
likely
to
seek
to
stabilize
their
currencies
and
so
be
able
to
support
more
foreign
investment

16. Global
vs.
Bilateral
Agreements
A
key
ques4on
for
the
next
decade
will
be
whether
we
will
be
able
to
achieve
true
global
agreements,
or
will
bilateral
trade
agreements
remain
the
way
by
which
na4ons
can
befer
manage
and
control
economic
influence?

17. Technology
has
Increased
the
Speed
of
Currency
Trade
With
profit
as
the
mo4vator
and
with
deal
speed
at
a
premium,
currency
traders
are
rarely
able
to
pause
to
consider
what
the
impact
of
their
transac4on
could
be
on
a
wider
society.

18. TradiOonal
Currencies
are
Being
Challenged.
Blockchain
is
to
trade
and
currency
what
email
was
for
the
postal
service.
It
is
allowing
direct
trade
without
recourse
to
a
trusted
third
party
and
at
a
frac4on
of
the
transac4on
cost.

19. Changing
Times
Tradi4onal
currencies
as
a
means
of
exchange
are
challenged
by
the
growth
of
non-­‐tradi4onal
payments
systems
and
peer-­‐to-­‐peer
currency
exchange
and
remifance
firms.

20. Currencies
of
Meaning
New
trusted
currencies
of
exchange
emerge
to
befer
facilitate
transac4ons,
trade,
authen4ca4on
and
valida4on.
Money
as
a
means
of
exchange
is
complemented
by
new
systems
to
which
we
afach
increasing
significance.

21. Digital
Money
Cash
is
gradually,
but
not
completely,
replaced
by
digital
money
providing
consumers
with
more
convenience
/
choice
–
and
organisa4ons
with
lower
cost
transac4ons.
More
new
offers
emerge,
including
in
the
black
economy.

22. Low
Value
Payments
One
area
that
is
likely
to
see
significant
transforma4on
is
low
value
payments
-­‐
everyday,
high-­‐frequency
purchases
for
which
cash
is
used
(typically
sub
$10
transac4ons)
and
make-­‐up
the
bulk
of
cash
transac4ons
today.

23. ProliferaOon
of
Currencies
People
will
increasingly
use
mul4ple
forms
of
currency
in
different
contexts:
alongside
na4onal
legal
tender,
we
will
see
more
local
and
crypto-­‐currencies
–
many
decoupled
from
exis4ng
systems.

24. Unfit
For
Purpose
Perhaps
it’s
now
4me
to
recognise
that
the
way
we
manage
money
is
not
fit
for
purpose
in
today’s
world
and
is
unlikely
to
adapt
to
the
changes
over
the
next
decade.

25. Empowering
the
Crowd
In
the
future
anyone
will
be
able
to
trade,
immediately
knowing
the
amount
they
are
paying
in
the
currency
of
their
choice.
The
number
of
par4cipants
will
drive
the
market
rather
than
single,
large-­‐scale
investors.

26. Pick
and
Mix
As
banks,
companies
and
communi4es
all
provide
different
currency
op4ons,
users
pick
and
mix
to
suit
their
needs:
Expect
a
mul4-­‐4ered
currency
system
to
be
normal.

27. Imagined
RealiOes
Currencies
are
no
longer
backed
by
assets
like
gold
but
by
a
belief
in
the
economy
and
imagined
reali4es.
New
currencies
will
emerge
built
on
percep4ons
of
stronger
trust
and
more
tangible
assets.

28. Global
Currency
PlaVorm
Alterna4ve
currencies
gain
trac4on
and
we
see
the
emergence
of
a
parallel
global
digital
currency
plaiorm
that
operates
without
na4onal
borders
-­‐
and
outside
the
influence
of
the
central
banks.

29. Financial
Services
DisrupOon
The
banking
industry
will
be
reinvented
by
the
adop4on
of
crypto-­‐currencies
that
also
cause
further
disrup4on
around
insurance,
liability,
audi4ng,
notary
and
other
associated
professions.

30. Bank
Robbers
of
Tomorrow
As
currencies
become
increasingly
digital
and
unsupported
by
the
state,
so
deposits
are
increasingly
virtual
and
dispersed
and
therefore
poten4ally
vulnerable
to
a
new
genre
of
‘bank
robber’.

31. Market
Chaos
The
currency
markets
are
chao4c
and
they
are
likely
to
become
even
more
so
over
the
next
ten
years
as
na4ons
increasingly
unpeg
themselves
from
the
dollar
and
other
currencies.

32. A
3D
View
of
Currency
Technology
will
allow
mul4ple
variables
to
be
compared
in
real-­‐4me,
producing
a
3D
view
allowing
traders
to
consider
what
they
are
buying,
why
they
are
buying
it
and
the
impact
that
this
may
have
instantaneously.

33. Future
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