Tokens in 2050
Where do we go next with the new digital tokens of the post-industrial revolution?
Noted Fintech investor Matt Harris, a partner at Bain Capital Ventures, predicted that fintech would mean the end of money as we know it. He wrote that in the future “our assets will be 100% invested at all times”. In this apparently radical vision of the future of money, transactions will be settled through the transfer of baskets of assets between counterparties without the intermediary of money. This world, in which assets are constantly on the move, sounds crazy – but Matt is right.
Early Tokens: The IBM Dollar
Way back in 1994, I picked up a report from the Centre for the Study of Financial Innovation (CSFI), a London-based think-tank, written by Dr. Edward de Bono, which had an immediate impact on me, coming as I did from the technology side of electronic payments and money. It was called “The IBM Dollar“.
The heart of the vision that de Bono set out in the pamphlet was that IBM might issue “IBM Dollars” that would be redeemable for IBM products and services, but are also tradable for other companies’ monies or for other assets in a liquid market.
The difference between IBM stock and IBM money, for example, is that IBM stock is a claim on something that is exchanged through intermediaries.
But IBM money is at least money-like in that it’s a bearer instrument that can circulate freely until it’s used to obtain some service from IBM at which point the IBM Treasury can decide whether to remove them from circulation (i.e., burn the tokens) or put it back into circulation by using them to buy something.
This will not be happening in a world of transactions between people but, as I wrote in my book “Before Babylon, Beyond Bitcoin“, transactions between what Jaron Lanier called “economic avatars” and what I lazily call bots. This is a world of transactions between my virtual me and your virtual me, the virtual supermarket and the virtual government.
This is my machine-learning AI supercomputer robo-advisor, or more likely my mobile phone front end, communicating with your robo-advisor to work out what basket of tokens it wants from you in return for one of my books or a speech to your conference.
Exploring the Transitions
Roger Osborne talks about how the effects of the Industrial Revolution spread far beyond technology and industry. He points out that the entrepreneurs of that new economy in time forced the financial system to change to accommodate their needs. By the time that the private tokens were replaced by a revived public money, the industrialists had built the new institutions that they needed.
In 1826 Parliament approved the setting up of joint-stock banks owned by shareholders with limited liability. This led to large-scale banks emerging in the industrial cities, a process that culminated when joint-stock banks came into the Clearing House, which allowed cheques to be exchanged between banks.
That period in history tells us how new money and banking systems were pulled into existence by the needs of industry. We can see how that period of creativity and economic growth adumbrates the coming era of agentic business and industry, the coming together of the web3 and digital assets, digital identity and virtual/augmented reality with smart wallets at its heart.
Davis reflects on the transition from the pre-industrial financial world to the new industrial age financial market infrastructure saying:
This was an unconscious, unplanned and still underestimated transfer of constitutional sovereignty; a partial financial democratization that preceded and facilitated the advent of political democracy.
It must surely be that case that the new financial infrastructure and institutional arrangements of the post-industrial will similarly facilitate political change. The fact is that both the history and the future of stablecoins are more interesting and more surprising than you think.