What will be in your wallet in 10 years?

Lukas Wiesflecker

Just now·3 min read

Let’s try to imagine what will happen in 2031. What will be in our wallet in ten years?

Predicting the future is not easy. However, given the current developments in payments, money, and crypto, we can think of some likely scenarios.

What will we have in our wallets, purses, and pockets in 2031? I think still a mixture of banknotes and cards, but with small changes.

Cash. The banknotes we have today will still be in use. There will probably be less than today, but we will use cash in the future for less tech-savvy merchants or anonymous transactions.

Hybrid banknotes

We will probably have banknotes that are quite similar to our banknotes today but interacting with a digital network.

The development is in the direction of smart banknotes, which is a physical token for a CBDC. Or it could be a crypto note, which is a physical stablecoin or physical cryptocurrency. You may soon have both types of this money in your pocket.

CBDC card

You may be able to get around smart notes, preferring to lean on your CBDC card. This is a smart card that allows anonymous, offline e-cash transactions. Mondex’s electronic wallet is the model for this hardware-based payment system, and others are developing updated versions.

Debit and credit cards. You may still be carrying debit and credit cards. However, in the long term, banks and credit providers are likely to remove these cards from the market and replace them with apps. By 2031, your credit score may be based on your crypto holdings instead of your credit rating.

You may be able to give up your physical wallet in 2031, but I doubt it. You may be one of the early adopters of payment apps, using an app that runs all your finances.

Cryptocurrencies will spawn very different special currencies: From stores of value to particular other use cases.

Store of Value (SOV) tokens

Some tokens specialize in holding value against fiat inflation or paying you interest. Such a store of value token could then be used for high-cost purchases (car or similar). I see basically two types of SOV tokens:

Bitcoin (BTC)

I think the consensus is that Bitcoin will be the predominant SOV in your digital wallet in ten years.

Non-fungible tokens (NFTs)

Your SOV tokens can also be NFTs, representing various assets such as real or virtual property, electronically traded funds (ETFs) that can be easily converted into a payment-based crypto, FIAT or CBDC.

Payment Tokens

These are forms of digital money designed for simple payments. Some of these tokens will be general-purpose and can be used in any transaction. Others will be designed to purchase specific goods and services, while others will be best for foreign remittances.

CBDCs

These currencies could be SOV or payment tokens. I think CBDCs are primarily designed for payment purposes. Every digital wallet needs these tokens to make general purchases or transfers. Besides, travelers, export-import merchants, and those who make frequent foreign payments can hold multiple CBDCs.

Target token

The idea of a target currency comes from a 1994 paper by Edward de Bono. Such currencies are flexible. Basically, they are proprietary currencies that merchants could use to promote sales and customer loyalty. For De Bono, target currencies could be issued by private companies at a discount. And they could be used to buy their products in the future.

When planning a future trip, this would be like buying airline points. De Bono predicts that all companies with their own target currencies will issue them.

Stablecoins

Stablecoins are likely to be the basis of future payments, as flexible transferable general purpose tokens are accepted everywhere.

Remittance tokens

These tokens are used to optimize remittances. On dedicated networks, they maximize speed and reduce costs.

Internet of Things (IoT) tokens

It may be necessary to have special tokens on your smartphone that interact with machines in the future. These IoT tokens facilitate interactions with vending machines, appliances, and home applications such as streaming services.

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