Technology is rendering the fiat money system of the 20th Century obsolete
Technology is rendering the fiat money system of the 20th Century obsolete, says Theis Simonsen, CEO of Tagion.
In an 8 October Ask Me Anything event on Telegram, Theis pointed out that while it will take time to show integrity and traction to onboard a critical number of users, change is inevitable.
Theis drove the foundation of Tagion because he sees that the FinTech revolutions of the early 21st Century, from electronic trading platforms to mobile banking to breaking down back-office silos, are now bringing about a qualitative leap. Moreover, open finance systems are now on the verge of being mature enough to replace the fiat system as solidified under the Bretton Woods agreement. For example, there is an increasing emphasis on cryptocurrency as a means of transaction and a continued build-out of financial products, which come as a result of the Bitcoin bull run of 2017–8, when the stability of crypto platforms and exchange rates were not in focus. However, proponents still need to take the long view.
There are practical implications to the shift in focus from ‘digital gold’, as Bitcoin is now called, to the use of other cryptocurrencies for payments. Theis maintained that two-thirds of banking is lending, but, “this requires a mature market infrastructure and an intrinsically stable, free-floating currency that is not bound to the “old” market structure.”
Theis says that bringing about a full-fledged open finance world requires us to patiently work toward this goal. Trust has to be established as well as the technical apparatus, and that simply takes time. Eventually, though he sees a world in which fiat is not completely replaced with open banking, but existing side-by-side with a multitude of digital means of exchange. Including the digital means of saving and investment that already exist, such as Bitcoin. And those who take the time to establish trust will be the ones to operate in the new environment.
Theis is the co-founder and CEO of Tagion. The company was founded in 2017 to provide an open finance platform for users world-wide to control, operate, and utilize as an alternative to the current fiat system.
