David Birch, The Currency Cold War

David Birch, The Currency Cold War

In this timely book, published during lockdown, David Birch sets out the need for an international debate about the future of money. Broadly, unless we (international institutions, governments, citizens) lead the discussion, then events will overtake us and technological solutions to the current problems of the international monetary and financial system will be imposed – by states such as China, by technology giants, by those who see cryptocurrencies as a cloak of invisibility.

He suggests three imperatives if there is to be a managed approach to new monetary arrangements:

• a digital identity infrastructure that offers both security and privacy
• some form of global e-money licence to create a resilient digital
  money ecosystem
• an approach to digital diligence which replaces the cumbersome and
  very expensive systems currently in place to combat money
  laundering, fraud and terrorism (KYC/AML)

David Birch explores the different kinds of digital currency and the drivers for change – cryptocurrency, the demise of cash (hastened by lockdown), financial exclusion, the need for better payment systems. He reminds us that the current institutional structures and systems are relatively modern inventions which no longer serve the purposes they were created for in a digital, more connected and faster moving world.

The current direction of travel of the US – less engaged in world institutions, ever more ready to use sanctions against those it disapproves of – may serve to hasten the deposition of the US dollar as the world’s Prime Currency. David Birch doesn’t focus on the politics, sticking to economics and technology, but the message is clear.

As ever, he writes with clarity and a light touch, making this complex subject accessible. However, his audience will remain those who are most embedded in the FinTech and financial systems world. This is concerning, as the issues should be much more widely debated; otherwise we will wake up one day to realise the train has already left the station.

David Birch

Perhaps his next book should be ‘The Currency Cold War Made Simple’, with the glossary of the present book much enlarged to include a set of definitions and examples to illustrate the many complex ideas so well presented throughout the book.

One of the case studies is about Bristol Pound. It identifies the high cost of running a local currency as one of the main reasons so many of them fail. Communities are one of the ‘5Cs’ David Birch expects to be issuing the currencies of the future, and the evolution of Bristol Pound into the e-wallet based Bristol Pay is an exciting example of what the future holds in the currency cold war.

Published May 2020 by London Publishing Partnership

Review written by Sally Britton, Bristol Pound Non Executive Director.