The trend this days is about the central bank digital currency (CDC).
This is a new field but it's building block is of they principles behind crypto currencies, but just in a national level and it's no longer decentralized but centralized.
Unlike Bitcoin, bitcash and other alt coins, these currencies are centralized, that is they are items and managed by the government.
The central bank of England has been leading the way with it's own digital currency and has been followed by other major countries.
We have been slowly moving away from cash to digital currencies, the next step is to completely move into digital money which may be pegged against the dollar like the ones we use today.
There may be some of potential implications at play here because no one seems to know exactly what this will all lead to. Let's look into some.
1) Tracking of transactions.
The centralization and digitalization of national currencies would capture every single financial transaction on a centrally keep block chain.
Paying for goods and services with fiat coins won't be possible again. The authority will now know how much you own and use. Obviously cash will be long gone by then and it will be easier for the authority to enforce a form of money that is being tracked on a centrally Leger.
This has a lot of benefits to to government around the world. Cause it's gonna help in fraud prevention and tracking.
Governments may want to introduce thier own form of central currency in other to benefit from digital money while also being able to control it.
This could lead to a new form of surveillance every time you spend money, it get recorded in an immutable ledger where you can't erase or alter the transactions since each has its own unique hash, tampering with it leaves marks . This will help in combating fraudulent activities.
2) This might be an instrument of bypassing international sanctions.
States under sanctions from WHO might be able to bypass the sanctions.
An economic advisor of the Russian government said the crypto ruble did them very well for sensitive activity on behalf of the state, that the can now settle account with there counterparts globally regardless of sanctions.
Since all transactions are encrypted by hash or another form of data signature the can't be traced back to its origin.
3) This could change the value of savings.
If CDC are being developed and over time replace fiat currencies, the logical next step would be the devaluation of the dominant forms of money.
If your savings were held in currencies like the USD or the GBP depending on where you are. What will your savings be worth once the USD or GBP goes digital?.
Well I don't know!!
Such a won't happen overnight but we can only assume that if central banks are pushing so hard on digital money, it's because the have a big interest of them going mainstream.
CONCLUSION
No one knows for sure where this is heading towards, one thing for sure is that they will be implications not just for financial Institutions but also for individuals.