When it comes to the future financial services world of tokens and DeFi I think it is reasonable to assume the while many of the assets that will be traded in this environment are going to be tokenised versions of the assets that are traded today, such as commodities and currencies, there will be some that are products of the post-industrial always-on economy. I think we need artists rather than technologists to imagine what this might be, but I think I can take a guess at what some of them might be.
Cities, for example, might well supply viable candidates for new asset classes because, as I recall the futurist Gill Ringland suggesting in her financial services scenarios for 2050, the ability to enter, do business and reside in desirable cities will become a valuable right and the basis for one of a number of demographic asset classes.
(In this context, Gill’s prescient narrative of the “C50” — the organisation of the 50 richest city-states that will replace the G20 as the mechanism for “managing” the world economy — forms a solid narrative around the future economic organisation of a successful, functional world. As the respected financial commentator Martin Wolf wrote in the Financial Times some years ago, “this is the age of cities, not of national economies”, before going to say that “it is high time London became a true city state.”)
Another set of candidate asset classes relate to energy, a fundamental need.
The idea might sound odd at first, but I think it is quite easy to imagine how such a system could work. A start-up launches and, instead of issuing equity, it issues money that is redeemable against some future service. So, for example, a wind farm start-up might offer money in the form of kilowatt hours that are redeemable five years from now. In the early days, this money would trade at a significant discount to take account of the risks inherent in the venture. But once the wind farm is up and running and producing electricity, the value of the money would rise. There might, in this case, be a demand for renewable energy that drives the value of the money higher than its original face value.
Xxx
According to the scientists, the E-Stablecoin would be minted through the input of one kilowatt-hour of electricity, plus a fee. The stablecoin could then be used for transactions the same way as any stablecoin, or the energy could be extracted by burning it, also for a fee.
From Scientists claim to have designed a fully decentralized stablecoin pegged to electricity.
While the proposal is theoretical, and depends (on my first reading) on some developments in quantum technology (around the fascinating topic of “counterfactual communication”), it does reinforce an opinion of mine formed int he earliest days of digital cash experiments that the kilowatt-hour might be a very suitable form of what we now (incorrectly) call a stablecoin. It wasn’t a new idea when I first wrote about it in the 1990s: Shane Turnbull wrote about it in the 1970s (see David Boyle’s wonderful book “The Money Changers” for more on this an other ideas about new forms of money).
xxx
This does make me wonder, however, what pension funds and retirement accounts might look like in a tokenised future. Maybe people will switch some of their savings from assets that they intend to sell in the future in order to obtain money so that they can buy electricity or water or food into tokenised versions of the electricity or the water or the food itself. Instead of putting shares for the electricity company into your retirement account, put the electricity in it instead. Buy tokens that are kilowatt-hours and stash them for future use!
xxx
Snippings 