James DiBiasio, MA, esteemed financial journalist and the author of Cowries to Crypto: The History of Money, Currency and Wealth, says he believes money is more abstract than ever in this new digital era. This is just one of many reasons to upgrade your digital skills and study for the CGMA designation, which concentrates one-fifth of its syllabus on digital skills in the accounting and finance profession.
In a fascinating FM magazine podcast, “Fintech: Past, present, and sci-fi future,” DiBiasio revealed how finance professionals, companies, and everyday consumers can approach this evolving paradigm.
From bitcoin central banks to AI's influence on consumers’ consciousness, DiBiasio charts a compelling economic history, chronicling development from Italian bookkeeping to today's technological advancements.
With predictions aplenty, one thing is sure: staying informed of these digital trends has never been more important.
Cryptocurrency considerations for organisations
According to DiBiasio, democratising finance from esoteric exchange instruments into tokenised, easy-to-purchase digital assets without traditional intermediaries has created more financially inclusive economies.
‘We're talking about the shift from Internet 1.0, the Internet of Information, to Internet 2.0, the Internet of Value. This will make things that have been historically difficult to value and exchange into things that are a lot easier to value and exchange’, he explained.
‘For instance, illiquid assets such as real estate will become more liquid and easier to exchange, while large assets, such as a block of Apple stock, can be broken down into smaller units and traded. This means more and more people can trade them, whether they are institutions or individuals’.
DiBiasio cites the birth of the bond market as a prime example of similarly new financial possibilities within digital currencies.
‘Bankers in Renaissance Italy created double-entry book-accounting for trading loans among each other; in other words, they created a bond market. I can see something happening in other forms of crypto where it could leap the fences and become more alive’.
Although DiBiasio says he believes bitcoin is the only cryptocurrency with a proven success record, companies considering alternative currencies as a means of payment should remain cautious.
‘First, there's the numerous rules and regulations’, DiBiasio warned. ‘Then, there are the customers. If it's an American like me, that will mean more paperwork. It also has negative connotations with illicit manufacturing’.
Future regulations of fintech
DiBiasio says he believes that regulation around developing fintech products and services will tighten. Though this may displease free-market idealists, a socioeconomic rationale exists behind it.
‘Withdrawing government funds is a slow process. This was seen first-hand in the COVID-19 pandemic.
‘A regulated digital currency could programme digital currencies for specific purposes, such as food, and to eradicate physical relief cheques. There are exciting ways you can design a digital central bank currency’.
Still, DiBiasio says crypto regulation is far from ideal, particularly for fintech companies.
‘Crypto must be regulated on its terms. It's a network, not a company. Financial regulation in America sometimes dates back as far as the 1930s. More traditional regulatory measures could cripple innovation and drive business elsewhere’.
A sci-fi future: Finance in the hyper-digital age
In this new era of 5G and AI, DiBiasio predicts two outcomes.
‘The prosaic answer is that fintech's biggest social benefit is making finance accessible to more people, even at the retail level, where they may lack a bank account. The same goes for small businesses or companies in supply chains. This creates a lot more financing opportunities with banks too’.
DiBiasio's second outcome is more dystopian.
‘The sci-fi prediction is reaching a stage where our wealth and ability to transact will become embedded in our biology, whether through wearables, a metal card, a photograph, a retina scan … all these things will allow us to be a walking portfolio’.
The CGMA designation: A finance credential fit for the digital age
Listen to the full FM magazine podcast episode on our Spotify channel.
