The biggest issue is the removal of physical cash, and especially how that affects older people, and those without bank accounts. I don’t have an answer for that…

There a numerous ideas of how digital currencies will work, and it seems clear to me that we already have the solution in place, structurally. Here are the components of money for the future:

Digital version of state currency

• It will run alongside traditional money for a few years
• The backbone run by the government
• Citizens still deal with banks

Privacy will be unchanged. Your bank knows your transactions, and the government can ask the bank for details.

Cryptocurrency

People can choose to transact using cryptocurrencies, as long as the other party accepts it. However, just like physical cash, all transactions over a certain amount – in Australia it is $10,000 – must be reported (legally anyway, and probably hard to enforce). Otherwise, totally private, with the trade-off being less stability, less trust and less likely to be accepted.

So cash and non-cash transactions become crypto and digital currency transactions, with the same rules and processes remaining.

International

And finally, there will be a big brand crypto player that people choose to use internationally. The special advantage will be for unstable economies with high inflation.

Just like PayPal and Western Union today, the global crypto will need to abide by the local laws of each country, so it won’t be particularly private.

Facebook’s Libra project is a good template for how it would work, although established players like PayPal have established trust, and Google/Amazon can leverage their digital products to seed such a currency.