The digitized world of money

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

I have already written that we are witnessing a rapid "digital transformation" of the world economy. It means that all countries, all industries, all markets, all companies and citizens will build their economic relations based on the use of information and computer technologies (ICT).

Experts identify three main areas of ICT application: 1) manufacturing, where robots will play an increasing role; 2) trade, where e-commerce is developing dynamically; 3) the monetary sphere.

Let us dwell in more detail on the digitization of the monetary sphere. Many types of operations here have long been digitized 100 percent. Let's say settlements and payments between banks. Suffice it to recall the information system SWIFT, through which 2.5 billion payment orders pass annually. At the same time, SWIFT is an international cooperative society, covering more than 9 thousand banks and other organizations from more than 200 countries. At the regional level, one of the most famous is the TARGET2 payment system, which connects the information systems of the central banks of the European Union member states.

Each country has its own national payment system serving banks and large organizations. For example, in the United States, Fedwire (Federal Reserve Wire Network) can be classified as such. It is a federal automated money transfer system for real-time gross settlements, managed by federal reserve banks and allowing funds to be transferred between participants, the number of which exceeds 9 thousand. Fedwire-connected lenders account for over 99% of all payments in the United States.

However, this digitization of the monetary sphere at the macro level was completed already at the end of the twentieth century. Now a new phase of digitization has begun - at the micro level. There are three main directions here.