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The future of Currency

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Towards a World Without National Currencies?

Branded Currencies Will Be The Dollars and Yuans of the 2020s.

The whole world knows bitcoins, the virtual currency that's setting the internet

on fire. But the future holds many surprises for currencies. If crypto-currencies

are beginning to appear today, tomorrow, branded currencies will see the light

of day.

Tomorrow, Coca-Cola Banknotes Versus Nestlé Credits?

Many brands have already launched their virtual currency in the shape of the

already well-known bitcoins, or more recently, 'ether' the revolutionary virtual

currency that will come into circulation this year. Amazon with its Amazon

coins, Facebook and its Facebook Credits, Pepsi's Pesos and even Beyonce

Bucks for the more imaginative, many branded currencies (because yes,

Beyonce is a brand) are monetizing your relationship and your fidelity with

your favourite brands. Thus, brands are strengthening their brand loyalty

through their virtual currencies.

If a world where Coca-Cola banknotes competes with Nestlé credits

seems far-fetched to you, believe us, it's not so far away, at least for

Millennials, those youngsters born in the 1980s as confirmed by a recent

study. According to the Edelman Trust Barometer 2014, 45% of 25-34 year

olds in the United States would be willing to use a 'branded currency' in their

everyday lives.

We won't be shopping with Beyonce Bucks tomorrow, you may say.

You're probably right.

But other forms of brand currencies exist and you may be unwittingly using

them already.

Beyond coins and credits, other branded currencies have been in circulation

for a long time and are well-integrated to consumers' daily lives.

Let us not forget that there are now more unused air miles in circulation than

dollar bills. Generally speaking, loyalty programs are often actual microeconomies.

Starbucks, for instance, sells as many espressos with Loyalty

Points as with actual money.

The world's global loyalty points stock is estimated at $165 billion. This is

equal to the GDP of Vietnam.

In reality, the strength of these business models is largely based on dormant

or unused loyalty points. Coupons lying in the bottom of our drawers and the

air miles that we let expire are essential to the profitability of these

programmes.

Some companies might go bankrupt, while more and more economists are

talking about a speculative bubble in the making.

In the Future, Currency Will Not Only Be Branded, It Will Also Be

Participative.

Creating brand loyalty through a points system is good, creating brand loyalty

by engagement with the brand is even better.

Nike's "Sweat your Bid" campaign proposes letting customers use their sweat

as currency in on-line auctions. Sensors in Nike sneakers calculate the

amount of sweat produced when you exercise. This is then converted into

Nike Fuel tokens valid to purchase in the Nike store.

Whoever said that money has no smell?

But branded currency is not simply a clever marketing ploy. It can also provide

a concrete answer to some politico-economic problems that national

currencies like the US dollar, or transnational currencies like the euro, cannot

solve due to their behemoth size and lack of flexibility.

Answering specific micro-economic issues is easier with a micro-currency

specifically tailored to a particular market.

In some African countries, in Egypt in particular, Vodafone launched Fakka, a

system that allows shopkeepers to give change by mobile phone credits.

For these countries with precarious economies, cash shortage problems are

frequent. Shopkeepers are obliged to barter or to give change to customers

with fruits or vegetables. So this is a really useful innovation for this situation

and an excellent prospective tool for Vodafone.

Similarly, a payment system called S-twit will allow French twittos to break

free from the constraints of banks to pay, transfer money or give to

associations, all for free and publicly. After all, in the future, money will no

longer be taboo.

Because, in the future, it'll be easier to own a smartphone than a wallet.

Sweden became the first country to officially announce the death of

banknotes. No date for implementation has been officially set as yet, but 80%

of Swedish are in favor of the principle. It must be said that payment by cash

represents only 5% of retail revenue in the country. Throughout Sweden, the

little sign "Vi hanterar kotanter ej" ("We don't accept cash") is a familiar part of

the national landscape. Mulled wine at the Christmas market or a beer at a

bar, even small amounts are paid for electronically. The customer's ID,

location, amount and type of transaction - a whole bundle of specific new data

is available to brands and banks!

Following Gold and the US Dollar, the Brand is the New Benchmark for

Monetary Exchange

As the world is running low on trust, especially in large political and economic

institutions such as stock exchanges and central banks, major brands are

increasing their trust capital.

When the reputation of a brand serves as a yardstick, sometimes the corner

drugstore offers the most telling experience. In New York, crack dealers are

more willing to be paid in detergent than in cash, but only if the detergent in

question is a barrel of Tide. Indeed, this core Procter & Gamble brand - the

American equivalent of our Ariel - is synonymous with quality, efficiency, and

therefore trust. In any case, Tide inspires more trust than greenbacks, which

can often be forgeries. This is so much the rule that it is not uncommon to find

Tide barrels fitted with anti-theft locks on New York drugstore shelves.

While this story is rather offbeat, it still draws our attention to the intangible

value of brands and their authority. If we had to use coffee beans for trade

tomorrow as the Pre-Columbian civilizations did, the owner of Nespresso

coffee would be very rich indeed (the latest limited edition coffee sells for 12

euros for a box of 10 capsules), whereas common mortals would be obliged

to bulk-buy their beans from Café Gran'mère or Monoprix.

With the development of mobile and social networks throughout the

Western world and developing countries, developing a branded

currency is not so complicated.

Beyond coins and credits, the future success of consumer brands will pass

through imagination and creativity regarding branding their currencies.

Engaging and retaining consumers, responding to micro-economic problems

while capturing a market, or establishing the brand as an absolute standard of

trust - and perhaps others not-yet-imagined issues.

Distribution, branding, digital experience, physical experience - today the

boundaries are blurred as our businesses are being redefined.

But at the heart of any device, the power of the brand is invariable. For us

specialists to imagine the future.

So many exciting projects for the coming years at the intersection of branding,

micro-economics and design.

One thing is sure, money may not buy happiness, but in the future, the

creation of new currencies will make some brands very happy indeed.

Suzanne Stahlie

MD FutureBrand Paris

Online article in French available here

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