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Dr. Philippa (“Pippa”) Malmgren, the founder of DPRM Group, a London-based company that helps companies, investors and policymakers better understand how risk and prices move across the economic landscape, said blockchain signals the end of cash during the recent Cayman Alternative Investment Summit.
Malmgren served as Special Assistant to the President of the United States for Economic Policy on the National Economic Council and is a former member of the U.S. President’s Working Group on Financial Markets, according to Wikipedia.
Blockchain Is ‘The Future’
“Blockchain is the future,” she said. “It means every time you do an electronic transaction of any kind – you buy something on the Internet, you go into a shop and use your credit card – it’s automatically recorded in the cloud.”
“There’s no longer a need for it to go into some ledger written down and then your accountant looks at it,” she said. “It’s all automatic, and it says exactly where you were when the transaction occurred.”
“It’s important,” Malmgren continued. “There’s almost a new accounting system, and it’s a new system of measurement that tracks everything.”
“You get 100 percent transparency over what’s happening in the economy,” she said.
People think that if they start using bitcoin or electronic money they will have privacy, she said, but “In fact, blockchain means everything’s visible to government.”
How Will Cash Go Away?
Blikre pointed out that cash still exists, which remains out of the government’s purview. “It’s not going to last long,” Malmgren replied. “People are not paying attention to how quickly electronic money can be introduced. In India, in 53 days they (the government) converted a billion people (to digital currency).”
An exclusively digital monetary system would make moving money around from people to business and business to business much easier, faster and cheaper, according to a report last year by Bloomberg’s editorial board. Increased efficiency and cost savings would benefit the poor, especially as their barrier to do certain high-fee tasks at banks would be lowered.
One of the largest challenges is convincing people that cash isn’t worth holding, the Bloomberg report noted. Political resistance against such a movement away from cash as currency to a digital fiat would be certain. However, educating the masses on the benefits of implementing a digital currency would be the main point of friction that governments could avoid in such a scenario.
Also read: What does the future look like without cash?
Malmgren is optimistic about financial markets in general. She thinks markets are responding well to a government promising less regulation. She believes stock markets are poised to reach greater heights.
Janet Yellen, chair of the Federal Reserve System Board of Governors, is looking to support rising inflation in the next few years, Malmgren noted.
Image from Shutterstock.