The Future of Payments and Digital Money

The payments ecosystem is currently undergoing a seismic shift, driven by the emergence of new technologies like stablecoins and central bank digital currencies (CBDCs) and sweeping regulatory changes. Leveraging their extensive industry knowledge, Brown and Pitkevich outlined a bold, forward-looking vision for digital money, but one that emphasizes the need for clear strategies and use cases for these technologies, backed by user-first design principles.
For those organizations in the payments industry looking to generate value and drive a lasting competitive advantage, their insights offer a roadmap to meaningful modernization.

Evolving Payment Paradigms

“The more we regulate stablecoins, the more we risk centralizing them, countering their very purpose.” — Alistair Brown
Opening the conversation, Brown provided a brief overview of the evolution of digital money, citing the initial failure of the Libra attempt at creating a form of privatized digital currency. Brown notes, “Effectively, the central banking community looked at this and said, ‘We can’t have Big Tech getting hold of digital money.’ This was the genesis of the concept of CBDCs. Central banks then spent several years with senior bankers, academics and other interested parties trying to figure out what this should look like. What we’ve got now is a very interesting next wave of thinking, which is the stablecoin; we’ve neutralized the volatility inherent in cryptocurrencies, and so again we have digital money issued privately rather than by the central banks.”

Stablecoins aim to reduce currency volatility by tethering tokens to fiat currencies on a 1:1 basis, offering stability and operational efficiency. However, much like the CBDCs that run in parallel to them, stablecoins are increasingly coming under global regulatory pressure. Ordinarily, that pressure might drive down demand, given it threatens to put a damper on some of the decentralized appeal of stablecoins as a payments tool. However, as Sasha Pitkevich goes on to explain, there may just be too much upside to stablecoins to keep a good idea down.

Global Lessons & Best Practices

“Focus on adoption from day one. Small, deliberate steps lead to success.” — Sasha Pitkevich
Pitkevich and Brown conclude their conversation by sharing lessons learned from their own experiences with digital currency implementation across various geographies. In this context, Brown advises starting gradually. “Payments providers should look to avoid big launches. Start with small, targeted use cases to reduce risk and ensure business cases are sustainable.” In other words, payments providers should look to prioritize pilot programs that align with immediate business goals.

In Closing

In the emerging world of digital currencies, there are very unique opportunities for inclined organizations to build unique offerings, open new streams of revenue and build lasting differentiation from their peers. However, they need to approach the technology with the right mindset. As Brown makes clear, “Corporate FOMO is not a reason to adopt stablecoins or CBDCs. Organizations need to align these projects with clear, data-backed business goals to ensure a meaningful ROI.”