From barter system to digital currency, money has been able to transform and adapt to different social tendencies maintaining its different uses: payment method, store of value and unit of account, or both.
The new and innovative trends involving digital currency together with the different methods of implementation coexist in a setting of some volatility, because they have been rethought and redesigned as a “work in progress”. A “completed” model of this new monetary system doesn´t exist, so dualities and tensions are bound to exist.
To understand this new currency system we highlight 5 macro tendencies that sustain and also generate a progressive dematerialization of money:
1 | DECENTRALIZATION OF POWER
Traditional institutions are put into question due to a great desire for autonomy, and money loses its role as a “backing” method: there is a shift from a centralized and validated production, to a logic where anybody can create energy currencies with a computer.
Line indicating centralization and present decentralization linked to the digital and financial world. Alexander Shulgin, 2016.
2 | DEMATERIALIZATION OF CONSUMPTION
In today’ s environment, that rethinks and looks to optimize the use of resources and materials, the impact of consumption and excessive production increasingly shapes the axis of innovation not only of the consumption event itself but also the exchange.
The owner of Patagonia brand donated his firm: 3,000 million dollars to protect the environment. Global.
3 | CONTINGENT VALUE
There is a growing freedom and subjectivity associated with value: currency is not only a means of exchange but also a form of representation, where identity and convenience come into play. Value is determined by offer and demand, less and less, it is something imposed by a specific entity. Uncertainty is part of the new milieu.
The iconic “llama que llama” (llama that calls), advertising character turns NFT. It will be possible to use it as a payment method in parties and metaverse events and a cryptocurrency will probably be issued: “the sterling llama”. Argentina.
4 | TOUCHLESS WORLD
The habits of the pandemic associated with the need to breach distances are here to stay. Today, digital currency is used in stores and has been adopted as a payment method; a new mode of operation.
Everyday less people use cash to pay; the financial inclusion fostered by Mercado Pago is the solution for a diverse range of merchants. Argentina.
5 | INNOVATION FOR RESULTS
To innovate is to offer transaction solutions with the user in mind: fast, easy and effective. The digital world is personalized looking to be more intuitive than predictable.
Brands seek alliances with financial services that maximize and increase the scope of their business.
Amazon Cash and Oxxo establish interoperability alliances to maximize services and offer solutions to clients. Mexico.
Understanding the inherent macro tendencies of the new paradigm about money and the different ways to use it helps us understand how the consumer or user is being affected, which are the values at play when choosing a payment method or currency, and how brands can capitalize this in their favor beyond a specific segment or industry, since this paradigm demands new solutions and innovative answers that strengthen the relationships with their customers with drivers or logistics, for example speed, ease and efficiency just to name a few.
Can you imagine addressing this issue with your brand in mind? In our next issue we will underline different communication tendencies that brands are utilizing with respect to the digital currency environment.
