The Future of Money: The Developments You Need to Know this Week (Issue 6 - 30 May 2020)

Dear friends - welcome back to my weekly newsletter where I share some of the major developments on the future of money that you need to know about!

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1. “Cryptocurrencies Including Bitcoin Are Not an Asset Class” says Goldman Sachs

Goldman Sachs discouraged clients from investing in Bitcoin this past week by stating that cryptocurrencies are not an asset class.

The presentation in question generated a lot of chatter across social media as well as the crypto industry. 

Many found this statement somewhat surprising considering Goldman Sachs’ existing investments in crypto firms and previous client updates on the Bitcoin market. 

It’s even more intriguing considering the recent wave of crypto announcements coming from some of the other large traditional financial services industry giants from J.P. Morgan and Fidelity to Tudor Investment Corporation and Renaissance Technologies. 

Not to mention the many recent crypto regulatory and tax announcements by governments and central banks around the world.

Various commentators pointed out that some of the offered arguments against Bitcoin were quite shallow.

For example, citing the risks of money laundering of cryptocurrencies whilst not mentioning that the vast majority of money laundering currently takes place via fiat currencies and the existing financial infrastructure. 

However, it is also important to mention that Bitcoin was only discussed for a couple of minutes in the hour long call, so Goldman Sachs may not have had the opportunity to elaborate on interesting statements like this one:

History will judge whether this was an accurate prediction that will be regarded as brilliant foresight or will forever be ridiculed as one of the worst predictions on the future of money. 

Source: boredpanda.com

2. Is the US Dollar still the Future of Money?

Not a week goes by without another debate raging over the US dollar and its role in the future of money. 

Former US Secretary of the Treasury Hank Paulson mentioned that the fact that the US Dollar has maintained this stature for so long is a historic anomaly and that China’s Renminbi has by far the greatest potential to assume a role rivaling that of the dollar. 

However, Paulson argues that sustaining the dollar’s status will not be determined by what happens in China but rather in Washington and the United States’ ability to adapt its post-COVID-19 economy so that it remains a model of success. 

Paulson also believes that the headlines around the impact of China’s upcoming digital currency are exaggerated as a “digital RMB would still be a Chinese RMB” and China is not “reinventing money”. 

We should expect more debate on this topic in the coming months.

One interesting trend that may play in the United States’ favour is that we are seeing record levels of US dollar backed stable coin adoption. Stable coins are digital assets that are backed 1 to 1 with fiat currency, like the US Dollar. 

In addition, many of the new initiatives, including Libra, will issue stable coins backed by fiat currencies—most notably the US Dollar.

Mark Twain once wrote, “The reports of my death are greatly exaggerated”. Could the same be true of the US Dollar?...

 Money Quote of the Week

The economy depends about as much on economists as the weather does on weather forecasters. 

Jean-Paul Kauffmann

3. Are banknotes sexist?

Despite my love for cryptocurrencies and CBDCs, I still love paper banknotes.

Whoever has been in my office in Hong Kong has seen my range of paper banknotes, from my Zimbabwean 100 trillion dollar bill to the demonetised Indian 500 Rupee banknote.

On a personal note, my biggest hobby growing up was stamp collecting and I still have my precious collection at my parents’ place back in Canada. 

Despite all the benefits of digital currencies (and the potential of non-fungible tokens), I truly believe that it will be difficult to recreate the visual beauty of many of these banknotes. 

So it was interesting to read a recent study that analysed the banknotes from over 150 countries and found some interesting takeaways. 

For example, the most widely used colour on banknotes today is green. 

Source: money.co.uk

Fun fact: The US used the green colour for its dollar in the 1860s as an anti-counterfeiting measure used to prevent photographic knockoffs, since the cameras of the time could only take pictures in black and white.

The analysis of over 1,300 banknotes revealed that politicians and royalty are the most common figures depicted (with Queen Elizabeth II clinging to the title of most popular figure, featuring on 45 different note designs across 11 countries!)

Source: money.co.uk

In line with my Money Quote of the Week above, it is perhaps ironic that economists only figure on 6 banknotes around the world! But also somewhat sad that sports figures appear more than inventors or medicine pioneers...

Also, it seems that birds and castles are the most common animal and structure. 

Source: money.co.uk

However, it’s important to note that there is a serious lack of gender representation across banknotes with only 7% of the notes featuring a female figure…So definitely an area that needs to be improved.

Actually, only the United Kingdom, Denmark and Jersey have a balanced or female favoured representation on banknotes. 

Whilst the future of money is very exciting, the history of money can be equally interesting!

Funny Post of the Week

Video of the Week

Fun video interview where I share not only my views on the future of FinTech and CBDCs but a lot of personal views including: 

- why I will need to completely reinvent myself every 5 years

- why I strongly believe that telling young people to focus on work-life balance instead of hard work is dishonest

- why COVID-9 will accelerate the development of Fintech

- why CEOs and the leadership of banks need to understand CBDCs

My Upcoming (Virtual!) Speaking Engagements

1 June - Mainnet (Will share on CBDCs at 2:40pm EST with Anders Brownworth from the Federal Reserve Bank of Boston)

3 June - FinTech Generations (Will share at 10:00am EST on the future of money in light of Libra, CBDCs, cryptocurrencies and the difference between Fintech innovation in Asia vs US)

5 June - Future of Payments in South East Asia (Will share at 2:00pm Singapore on CBDCs, stable coins and their impact on global payments)

11 June - Virtual Blockchain Summit

15 July - ABS Summit

My Media Mentions Last Week

Cointelegraph - LG Joins Hedera Hashgraph Governing Council

Bitcoin News - Goldman Sachs Hosting Bitcoin Call

Enjoyed this content? Make sure to subscribe or share it with a friend! A new Future of Money newsletter will be in your inbox each Saturday!

See you all next week!! 

Henri Arslanian

*Please note that this newsletter reflects Henri’s personal views and not those of any organisation he is involved with.



Who is Henri?

Passionate and focused on the future of finance and money, Henri Arslanian is the PwC Global Crypto Leader and Asia FinTech Leader, the Chairman of the FinTech Association of Hong Kong and an Adjunct Associate Professor at the University of Hong Kong, where he teaches the first FinTech university course in Asia.

With over 500,000 LinkedIn followers, Henri is a TEDx and global keynote speaker, a best-selling published author and is regularly featured in global media, including Bloomberg, CNBC, CNN, the Wall Street Journal and the Financial Times.

Henri was named by LinkedIn as one of the global Top Voices in Economy & Finance and is the host of the FinTechCapsules™ and CryptoCapsules™ social media series.

Chambers Global recently named him the “highest-profile FinTech consultant in Hong Kong” and Asian Private Banker awarded him the “FinTech Changemaker of the Year” award. Separately, Onalytica ranked Henri as the #1 most influential individual on Finance globally on LinkedIn (and #8 on Twitter) out of 50K+ individuals working at the top 48 professional services and management consulting firms in the world.

Henri’s latest book, The Future of Finance: The Impact of FinTech, AI and Crypto on Financial Services, published by Palgrave Macmillan, was ranked as one of Amazon’s global top 10 best-sellers in financial services and was recognized as one of the “Best FinTech Books of All Time” by Bookauthority.

You can learn more about Henri on his website (www.henriarslanian.com) and you can reach him at info@henriarslanian.com