For any digital currency to take off it needs to come from a business people trust, and it needs to be widely distributed, and perhaps it needs to be forced onto people.

While governments will ultimately be the only winners in this space – because they can legislate against anyone else and they can’t lose control of currencies, banks could make a play. Banks obviously have the technology and infrastructure, and people already use their products to make payments.

Distribution can be easy and fair – by attaching it to either interest paid or received by customers. One BankCoin for every $100 in interest.

All the bank needs to do is make the BankCoin redeemable in enough places for people to benefit from it. Perhaps public transport, convenience stores and major online shopping destinations.

It could be seen as something similar to a loyalty card, that in effect gives a 1% discount – for example FlyBuys in Australia. The average mortgage repayment in Australia is around $2000, so that would be $20 per month in BankCoin. You’d want it to be around $100 per month to be widely adopted, so that is a 5% discount. Perhaps too much?

But what benefit do the banks receive for giving away 5% of their profits?

Micropayments. They are a product that will definitely happen one day, will work best if provided by a bank, and are only really achievable with a digital currency.

Once there is enough BankCoin out there, banks can stop issuing it, and just reap the benefits.

Oh, and all the banks in one country could work together on this…