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Charting the evolution of programmable money

Despite intense opposition from some commercial banks, interest in digital currencies hasn’t waned

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Programmable money is real money represented in digital form, also known as tokens. Monetary digital assets and the interconnected networks where they live are becoming the heart of the new global financial infrastructure. This digital currency is tracked with corresponding electronic ledgers, most popularly blockchains, enabling a transactional record that is publicly and securely shared.

The most famous digital currency — Bitcoin — thrilled its backers as it soared to near USD 20,000 in December of 2017. And just as quickly, its volatile nature had it crumble to USD 3,000 just a year later. The advent of Bitcoin was met with extreme skepticism by banks. And for many of them, the volatility and steep slide validated that skepticism. Most banks see cryptocurrencies as a risk to their clients, and a potential threat to their business models. As much as 40 percent of banking revenue in aggregate is derived from payments and other fees, so banks’ reaction to digital currency isn’t unexpected. Nonetheless, the idea behind cryptocurrencies remains a hot topic. Ultimately, digital assets that can be exchanged in real time independent of currencies and asset classes present a new model of efficiency and transformation for global financial services that may someday change the world.

For more information, download the IBM Institute for Business Value Expert Insight, “Charting the evolution of programmable money.”

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Meet the authors

Jesse Lund

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, Vice President, Global Blockchain Market Development, IBM Financial Services Sector

Jed McCaleb

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, Stellar Cofounder and Chief Technical Officer

Mike Kennedy

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, President, OFX North America

Nicholas Drury, Global Banking and Financial Markets Leader, IBM Institute for Business Value

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