Foreword

‘Money is like a sixth sense without which you cannot make a complete use of the other five.’

William Somerset Maugham

Without huge revolutions, we would not be who we are today. Inventions, social innovations and intellectual breakthroughs are all crucial in human history. There is little doubt that money is among the most significant social innovations. It has always been present in people’s lives, ever since humans started living in communities. When exchanging resources, the parties had to find a common way for measuring value. This can take the form of shells, rocks, tobacco, metals, paper or even today’s digital currencies.

Our decade may see a radical acceleration of financial innovation. The rush for resources is already focusing on technological innovations. The digital wave is changing the way our world operates, including not only sustainability and green transformation but also a profound change in how people think about money. The ‘digital competitors’ (global technology corporations also known as BigTechs) entering the market of financial services may produce the ‘digital rivals’ to national currencies through the digital means of payment they offer, which can fundamentally transform the monetary system as we know it today. Central banks also need to respond to this challenge. In the decade of financial revolution, central banks the world over are looking at possible ways of introducing digital currencies, while the global role of central banks has changed completely. Some of them, for example the People’s Bank of China or the Swedish Riksbank, have made good progress in their projects

related to the opportunities of introducing a central bank digital currency. These developments may help the financial inclusion of those who currently do not use banking services, making the access to money very cheap, super fast and safe for companies and individuals alike, and money could move across borders quicker than ever before. This could present a major challenge to cash. In terms of developing and implementing central bank digital currency, artificial intelligence and several other technological innovations, China is leading the way, and therefore the 2020s may be about Asia. It is time for Europe to find its own solutions in renewing the financial system. Only those will be able to overcome the three major challenges of our century, namely geopolitics, technology and money, who manage to tackle all of them. Those who miss out on the financial revolution will also lose out in the other two.

György Matolcsy