What you should know about the monetary system – Part 3 The Future

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We have already talked about how the monetary system has evolved and what it looks like now. That leaves the last part, which is to look into the future, where the monetary system may be heading. Let’s take a look.

If you missed previous parts of this article, you can find it here: Part 1 History, Part 2 Present times


The first thing that is in development and in some cases, such as in China, in use already, is CBDC, or central bank digital currency. As the name suggests, this is a digital currency, so there will be no need to mint and print money, but it will be created digitally, by the central bank. Transactions will be instantaneous and access to the money will be probably through your mobile phone. It makes CBDC a very good candidate for the future set up of the monetary system.

However there are some obstacles as well. Testing the functionality of a CBDC will take a lot of time and finding general suitable solutions for different needs of people is also not easy. With CBDC, there is the ability to track the movement of every single coin from start to finish, without the possibility to launder dirty money or hide any transaction from the state regulators and authorities. CBDC projects are already in the works in a number of countries. The furthest along is China, where their CBDC e-CNY is already being tested on a large scale already as a part of monetary system.


DeFi stands for decentralized finance. It can be described as an extension of existing cryptocurrencies, or a second layer functionalities of the current blockchain, mostly Ethereum. But the cryptocurrencies themselves can only be borrowed, paid with or saved. Other services that are associated with cryptocurrencies are mainly the domain of centralised exchanges. DeFi services do not hold users’ funds in digital wallets that only administrators would have access to. Users make deposits to smart contract addresses that have transparently defined terms under which those funds can move.

DeFi is still an evolving environment. However, we can expect more applications and opportunities to come from the decentralized finance environment in the future for monetary system. By October 2020, over $11 billion (worth in cryptocurrency) was deposited in various decentralized finance protocols, which represented more than a tenfold growth during the course of 2020. As of January 2021, approximately $20.5 billion was invested in DeFi.


A non-fungible token (NFT) is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files. Access to any copy of the original file, however, is not restricted to the buyer of the NFT. While copies of these digital items are available for anyone to obtain, NFTs are tracked on blockchains to provide the owner with a proof of ownership that is separate from copyright. The NFT market value tripled in 2020, reaching more than $250 million. During the first quarter of 2021, NFT sales exceeded $2 billion.

Tip: This article could also be interesting for you: 3 generations of cryptocurrencies


Recently, the so-called Metaverse has also started to emerge. The word consists of the prefix “meta” (meaning outside) and the stem “verse” (a back-formation of the word “universe”). You can find it as a description of the concept of a future iteration of the Internet where 3D virtual spaces are persistent, shared and connected together to form this virtual universe. There is no need to imagine something we don’t already know under this name.

Basically, imagine that instead of reading a text about dinosaurs, you could see them in 3D and get up close and personal with them. If you have seen the movie Ready Player One, the world Oasis is the basic idea of how a metaverse could look and work like. It would also require an own payment system, based on digital currency, or currencies and blockchain for transparency and instantaneous transactions.


A fully developed metaverse could in the future combine all of the above mentioned systems, together with virtual reality or augmented reality in one ecosystem, where people could interact with each other in virtual reality, instantly make purchases for digital currencies, exchange goods and services either digital or their equivalent in the real world, make art, educate themselves… the possibilities are numerous and we might evennot be able to see all of them yet.

Sources: wikipedia.org, ethereum.org, cnb.cz

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