Predicting the Monetary Future

"[T]his card is issued for a certain number of dollars. We have kept the old word, but not the substance. The term [dollars], as we use it, answers to no real thing, but merely serves as an algebraic symbol for comparing values of products with one another."

This quote is from the book, "Looking Backward," by Edward Bellamy published in 1888. It is a time-travel novel where someone from 1887 ends up in the year 2000. By which time, the US has become a utopia.

In this world, a dollar is only a unit of account. There is no need for a medium of exchange or a store of value. In this utopia, everyone can have whatever they want using a government-issued debit card that contains, basically, a universal basic income, which is the same for everyone.

Bellamy has an original way of looking a value, credit, and money. The end of the nineteenth century was full of new ideas like this.

But, he also foresaw one the effects of crypto, which is to “unbundle the functions of money (store of value, medium of exchange, and unit of account).” In an article, “The Digitization of Money,” the authors predicted in 2019 that “Digital currencies may specialize to certain roles and compete exclusively as exchange media or exclusively as stores of value.” This was certainly what we saw in the case of Bitcoin with the narrative of it as digital gold and a crypto store of value. And, some stablecoins are designed only for exchange. We can probably expect more specialization in the future.