Developing scenarios for the future of money

To provide a data-rich basis for our research, we processed and simplified more than 2.9 million global articles and data points using advanced AI tools, giving us a holistic view of the money and payments landscape. Topics connected with value storage, transfer and exchange were given particular emphasis.

To make sense of this massive data set, we created visualisations to represent key trends and the relationship between them. For example, the figure below sets out an overarching view of key trends that surfaced in the AI analysis, and a ‘drilled down’ view in the Money Cloud.

This rich dataset was then supplemented by conducting interviews with a panel of experts across ten countries on four continents. This allowed us to draw on a wide pool of subject-matter expertise, both from our Deloitte global network as well as external experts. This brought crucial context to our analytical findings, helping us to identify the discrete economic, social, political, technological and environmental drivers influencing the money landscape. These drivers were assessed in terms of potential impact and certainty. We were particularly interested in the critical uncertainties that would be the biggest ‘swing items’, should they materialise in the future. Examples of critical uncertainties include:

• whether the lines between fiat and crypto currencies blur, driven by accelerating payments innovation
• whether platform-native coins for the metaverse or Web 3.0 applications proliferate
• the degree to which digital assets are accepted as mainstream units of value
• whether underlying control of the global monetary system becomes decoupled from oversight by nation states
• the efficacy of monetary policy as traditional structures and institutions are challenged
• the level of interoperability across infrastructures globally
• the basis of competition in the payments landscape.

Ultimately, through our analysis and in discussion with our panel of experts, the two potentially most influential critical uncertainties, which are both highly impactful and independent of each other are:

• the level of adoption of digital assets, and the extent to which they become mainstream
• the posture of authorities and other regulators, and the extent to which they will control the emerging value landscape.

These leading forces became the x and y axes driving our Future of Money scenario model (see below), and giving us four distinct scenarios, each describing a possible outcome for the future of money. They are intended to illustrate how this important debate might play out and will, we hope, be of value to anyone seeking to better understand and plan for their own individual future of money.

With this as our starting point, we assessed how story elements and major events might play out to imagine and define each scenario more fully, identify potential triggers and think through implications and success factors for key stakeholder groups in the ecosystem. The four scenarios will be explored in more detail in future blogs, but are summarised below.

Highest freedom: a highly unregulated market results in the dominance of tech companies and flourishing innovation, which allows the rapid expansion of digital assets

Village economies: the fragmentation into both digital and physical silos undermines effective regulation, while both society and businesses largely eschew digital assets

United in prudence: strict regulatory frameworks focus on evolution, preserving the status quo and keeping system risks at the minimum; the adoption of unregulated or decentralised digital assets remains niche

Government coins: digital assets will flourish, however, the regulator will ensure the monetary sovereignty of the economy and regulate accordingly

These are four very different scenarios, reflecting the uncertainties created by the range of potential impact between the endpoints on the spectrums of adoption of digital assets and of regulatory posture. These uncertainties do not reduce the need for institutions to prepare themselves for the change ahead – quite the reverse. The question, of course, is what to prepare for by when, and how to do it.

Coming next: Scenario 1 – Highest freedom – a world in which digital assets take hold, but regulators struggle to exert control over this new money order.