Despite bitcoin’s technical flaws, Chris Skinner does believe there will be a global currency in the future.

I was at a big bank’s conference the other day and was intrigued at how often the subject of cryptocurrencies and bitcoin came up. It’s a topical thing at the moment, with the price of bitcoin surging past the $4,000 mark and Goldman Sachs going against JP Morgan, and saying that they might even trade in it.

The conversation at this particular large bank’s meeting went along the lines of bitcoin being a broken model: it’s a bubble and you should definitely not invest in it. The reason for not investing is based on two major factors:

  1. Governments don’t recognise it as a currency. When you’re dealing with money, 34% of all transactions is tax – corporation tax, personal tax, value added tax, employment tax, national insurance tax, etc. When a third of all payments are government taxes and governments don’t recognise your currency, then it’s not a valid token of exchange.
  2. It’s not a store of value. You cannot predict the price of a bitcoin due to the fact that its supply doesn’t match demand. This is why the price is increasing today, and why it has such sudden drops in value, due to the supply and demand structure of bitcoin. There is, in other words, no monetary controls of the monetary supply. Unlike US dollars, where the Treasury might regularly be burning billions of dollars of physical notes to reduce supply when demand weakens, you cannot do that with bitcoin. This means that if I hold a dollar’s worth of bitcoin today, I cannot guarantee that in a year or two it will still be worth a dollar. It might be worth $1,000 or nothing in a year. That’s no store of value, and to be a valid currency you have to have certainty about its value in the future as a store of value.

For these two reasons, the bank dismisses bitcoin as a speculative asset class and no currency of the future. In fact, the CEO of the bank concluded that the most likely scenario is that real fiat currencies transition towards fiat digital currencies over time, but that no new currency would ever take over.

I’m not sure I agreed with this assessment of the world. I’m not a bitcoin fundamentalist or promoter, and believe it has far too many technical flaws to ever be a reliable global currency, but I do believe there will be a global currency in the future.

Global currency, breaking down national barriers

A banker pulled me up on this in one of my recent presentations, saying that he was surprised that I was promoting the idea of a global currency in the future, because no nation would recognise a global currency. Currencies – money – is all about government and the economies of nation states. For a global currency to take off, you would have to remove the walls of the nation states.

I would argue that this is true, but it’s happening whether nation states like it or not. The internet is global and the internet is demanding a global currency. The internet doesn’t recognise national borders, and as the network grows more and more pervasive through the internet of things and the mobile network, it’s demanding that we create a global value transfer mechanism that’s fast and free.

A currency of currencies

Bitcoin offers that promise, but due to scalability and cost, it doesn’t make sense in its current form. However, there will be bitcoin 2.0, 3.0, 4.0 and more iterations and validations and corrections over the next decade, and eventually there will be a digital currency for planet Earth. This digital currency may be tied to a basket of fiat currencies – the dollar, euro, yuan, yen and pound – and those fiat currencies may also now be digitised, so you have a double-digital currency; a currency of currencies; a currency recognised by the G20 as a valid cross-border exchange mechanism that can be taxed, even with a network that doesn’t recognise nation states or borders.

This will be challenging, but seems inevitable given the fact that the trend towards globalisation is unstoppable. We talked about globalisation a lot 10 years ago as the BRICS emerged, and that discussion seems to have died down since the global financial crisis hit. Everyone wants to retreat to nation states and domestic focus, as evidenced by the votes for Brexit and Donald Trump. But I think globalisation is creeping upon us no matter how much we resist or ignore it. This is why our globalised network of digitisation gives us a global platform for talk, trade and commerce, and if you have a global platform for trade, then inevitably you have to a have a global currency to support such global trade.

A currency for a multi-planetary world

The currency for planet Earth also makes absolute sense as we talk about become a multi-planetary species. You may not be talking about this, but Nasa, Elon Musk, Jeff Bezos and Richard Branson certainly are. The agenda for building human life on other planets is well under way, with Mars colonisation planned by 2040. If we end up being a species living in a harmonised planet Earth, then a currency for planet Earth also makes senses. It just makes sense, regardless of the dismissive views of nation state bankers.

So, roll on bitcoin of the future. Meanwhile, if you don’t like this idea, go join the worldwide campaign against globalisation.

READ NEXT: Understanding the world of cryptoeconomics

– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more of Chris’ articles for 11:FS right here. Image by Toria,

About the author

Chris Skinner

Chris Skinner is an independent commentator on the financial markets through the Finanser, and chair of the European networking forum the Financial Services Club, which he founded in 2004. He is an author of numerous books covering everything from European regulations in banking through to the credit crisis, to the future of banking.

About the author


11:FS is a "digital transformation agency" that believes banking should be about more than selling financial products. It is co-founded by David Brear, Jason Bates, Ross Methven, Meaghan Johnson and Simon Taylor. 11:FS produces FinTech Insider, and provides services such as 11:FS Pulse, 11:FS Ventures and 11:FS Talks.

1 Comment

  • I trust eventually this will be the case. The question is – when? I think the minimum timespan is about 50 years or so. The closest example and the first candidate to become such global currency is the euro. And look at the history. The ECU, euro predecessor, appeared in 1979, which is almost 40 years from now. And, I believe, the talks and plans for ECU started around 5-10 years before it appeared. So probably about 50 years back.

    50 years! And we see that Euro Zone is still in the very beginning of its journey, and experiences a lot of challenges. And this is just 19 countries today.

    Can we imagine 100 or 200 countries involved? Wow – that will take ages. So I think my 50 years is too optimistic a forecast.

    I think bitcoin itself will die eventually, buried by distrust the current bubble’s (eventual) burst will bring. Of course, there will be others, but it will take time before any of such currencies become globally dominant.

    I trust 5-10% of global trade in cryptocurrencies is viable, but still, needs a lot of investment and economic/financial brainpower. More – don’t think so. Not in the next 50 or so years.

    We could create a realistic scenario of how this will happen, but I think no investors will be interested in it in the short-to-mid-term. So, once the hype is gone, the industry will become much more realistic than it is now. THEN we will see the real picture.

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