Ethereum inventor Vitalik Buterin recently wrote that while many national governments are “inefficient and slow-moving” in adjusting to changes in the needs of populations (and, I might add, environments), cities and states have the potential to deliver much more flexible and dynamic responses. Vitalik focused in particular on cities, observing that there are great cultural differences between cities and therefore it is easier “to find a single city where there is public interest in adopting any particular radical idea” than it is to find, or convince, whole nations.
This is a fascinating perspective, and one that I have much sympathy for. In my 2017 book “Before Babylon, Beyond Bitcoin” I suggested that the multiple monies of the future will be linked to the multiple communities we will inhabit and that there were reasons for thinking that the city identity might well turn out to be the most important. Cities as well as being the focus for economies and economic growth are above all physical locations and, as I recall the futurist Gill Ringland suggesting in her financial services scenarios for 2050, the ability to enter, do business and to reside in desirable cities will become a valuable right and the basis for one of a number of demographic asset classes. There was an illuminating Financial Services Club discussion about this in London last year, where the even more expansive view that cities might begin to dictate the policies and trajectories of the nation state was put forward.
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 commentator Martin Wolf wrote in the Financial Times some years ago, “this is the age of cities, not of national economies” (and he want on to say that “it is high time London became a true city state”).
These views may have seemed fanciful to readers then, or indeed now, but I am not so sure they can be easily dismissed. CityCoins, which is a startup backed by Balaji Srinivasan and others, is launching MiamiCoin, a token that raises money for the city while allowing its holders to earn mining and staking fees. According to the company, MiamiCoin has already raised $21 million and there are plans to launch an NYCCoin as well. (Ahead of the curve, Akron OH as been experimenting with a city coin to reward citizens for shopping locally and there have been similar initiatives in the UK, such as the Brixton Pound.)
This was foreseen by the wonderful Jane Jacobs’ in her book “Cities and the Wealth of Nations” that was published way back in 1984 and my Jacobs-influenced city-centric perspective was reinforced when I happened to read a Canvas8 report “The city an an identity anchor” (which echoed Gill’s points about identity) and the World Economic Forum (WEF) 2017 report “Cities, not nation states, will determine our future survival“. The first C50 meeting can’t be that far away and I’m sure that money will be on the agenda.
If the economy shifts and people find themselves in a depression, then more cities and their hinterlands may well decide to decouple themselves from national and supra-national currencies in order to manage their own monetary policy on the road to recovery. What’s more, the pandemic means new thinking is acceptable and many people are looking toward city-centric means of exchange as a specific kind of complementary currency that may contribute to rebuilding economies, and on the other hand the technologies of money have advanced considerably in recent years as the electronic money evolutionary tree has grown and flourished. Brixton bank notes might be pretty, but a Brixton app makes more sense, especially in the post-pandemic contact-free retail environment of the future.
Is Vitalik on to something? I think he is. Would such competing currencies really be a big problem? If I live in London and use London Loot for the train, for lunch and at the supermarket, is it such a big deal to convert it to Chicago Cabbage or Bronx Bucks to buy something online? Especially when your phone does it for you and an AI f/x bot is vigilant on your behalf to get the best prices? I don’t think so. Your phone could trade a million different currencies in the background while it is displaying the price of your coffee and bagel in LA Lolly, which is the currency that makes sense to you.
The idea that countries should have currency will soon seem as quaint as the idea that countries should have an airline. Some will have none, some will share, some will have several and life will go on.