Is It Game Over for Fiat Currency Finance?

Digital Money 2025 Recap

On 16 June 2025, Future of Finance hosted Digital Money 2025: Is It Game Over for Fiat Currency Finance? in London, bringing together central bankers, banks, fintechs and digital asset leaders to debate the future of money in an increasingly on-chain world. Discussions centred on whether fiat currencies can endure or be displaced by cryptocurrencies, stablecoins and CBDCs, and on who will control the next generation of payments and financial infrastructure.

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The Event in Numbers

5

Panel Sessions

28

Speakers

100+

Registered Delagates

80+

Represented Companies

Key Takeaways

Keynote

1. Panellists largely agreed that fiat currencies won’t go away but will share the stage with Stablecoins and select cryptocurrencies. The future of money is expected to be interoperable, combining the strengths of multiple systems rather than being dominated by one. 2. Central Bank Digital Currencies (CBDCs) inspired little confidence. Despite their potential, slow progress and low public interest, particularly in the U.S., suggest they won’t drive the next monetary revolution alone. 3. The USD remains dominant, but it was noted that rising debt, sanctions, political instability are gradually eroding trust. -Unlike volatile cryptocurrencies, stablecoins are being used for real-world transactions, especially in regions where traditional banking access is limited. They serve as a digital bridge between fiat and crypto, enabling faster, cheaper cross-border payments. 4. The future of money will not depend on who issues it, but on how well it performs. Factors such as speed, programmability, transparency, and ease of use will define winners in the future. 5. Many people do not realise that bank deposits are not actual cash holdings or assets, but liabilities of the bank. This lack of financial literacy poses a serious risk as we move toward more complex, digital monetary systems.

Can fiat currencies survive?

PANEL 1

1. Cryptocurrencies like Bitcoin are unlikely to replace fiat currencies in the foreseeable future due to volatility, limited scalability, and poor suitability as a medium of exchange or unit of account. 2. Bitcoin is commonly regarded as a speculative or store-of-value asset, similar to gold, rather than functioning currency. It lacks sufficient stability and institutional support to serve as sovereign money. 3. Fiat currencies are backed by legal authority, societal trust, and long-standing infrastructure. The U.S. dollar, in particular, was highlighted as the most decentralised financial instrument by global consensus and usage. 4. Stablecoins, particularly USD-backed ones, are emerging as a more practical bridge between fiat and crypto. They are already being used in real-world transactions (e.g., commodities trading) and show potential to transform payment rails. 5. While trading venues and derivatives in crypto are developing, the lack of core elements such as clearing houses, regulatory standards, and robust custody solutions, limits broader adoption. 6. A philosophical divide remains: should crypto replicate traditional finance or forge new decentralised systems? DeFi lending faces criticism for lacking underwriting risk, contrasting with banks’ role in enabling economic growth. -Some central banks are exploring Bitcoin for reserves, but concerns remain. Unlike gold, Bitcoin governance is less transparent, and lack of liquidity and stability does not help. 7. The final word was cryptocurrencies won’t displace fiat soon, but Stablecoins and tokenised assets may incrementally reshape financial infrastructure, particularly if regulation and institutional engagement grow.

Can cryptocurrency displace fiat currency?

PANEL 2

1. Most agreed that banks will remain central leveraging their compliance, infrastructure, and ability to offer new services, even as stablecoin gain traction. 2. We may see structured, tradable versions of time deposits, providing “sticky” capital for banks and more flexibility for customers. -Stablecoins aren’t exempt from rate risk. If interest rates drop, it could challenge the business model of reserve-backed stablecoins, especially those with narrow margins. 3. We’re likely to see more choices in digital cash, but fragmentation would hurt adoption. Convergence or standardisation will be key for usability. 4. The ‘killer app’ is still to come. Current stablecoin use cases are at an early stage. Future breakthroughs may come from areas like tokenised treasuries, programmable finance, or cross-border liquidity. 5. Stablecoins and tokenised money markets can boost demand for treasuries and provide governments with a strategic tool to improve financial resilience. 6. Geopolitical shifts and the demand for dollar alternatives are driving global stablecoin interest. Access, especially in emerging markets, will define adoption in the coming years.

Do money, payments and credit need banks?

PANEL 3

1. Digital transformation in payments is accelerating, with more banks adopting wholesale and commercial digital tokens to improve efficiency and reduce costs. 2. Cross-border payments face constant challenges including high costs, delays, and lack of transparency, largely due to regulatory and governance complexities rather than technology limitations. 3. Trust is essential. Successful digital currency and payment systems require legal frameworks, clear rules, supervision, risk management, and dispute resolution beyond just secure code. -Public-private partnerships and governance structures are critical but take time and resources to build, which slows down implementation and adoption. 4. Progress is ongoing, although it may feel slow. Industry collaboration, organised projects, and regulatory engagement have significantly increased over the past five years. 5. Existing financial systems are evolving, not broken. Innovation must carefully integrate with current infrastructures without compromising stability or trust. 6. User needs vary, and clients emphasise the importance of multiple payment rails to accommodate different preferences while maintaining reliability and operational simplicity.

Who will control the digital money infrastructure?

PANEL 4

1. Simply digitising traditional assets like funds is not transformative unless it’s tied directly to real-world events and delivery. True value lies in solving inefficiencies and unlocking new workflows, not just automating old ones. 2. The lines between Stablecoins and tokenised funds are blurred, as both serve similar functions but are regulated differently. This inconsistency creates confusion for issuers and investors, especially around liquidity, risk exposure, and redemption rights. 3. A lack of harmonised global regulation, especially for Stablecoins, is holding back adoption. Even when rules exist, localisation of reserves and differing national requirements (e.g. in US vs EU vs Asia) create fragmentation and operational friction. 4. Legacy infrastructure, regulatory ambiguity, and lack of competitive pressure discourage large institutions from investing in transformation. Many are waiting for clear mandates or competitive threats before making changes. 5. There’s more progress happening in emerging markets (e.g. UAE, Singapore) where there’s less to lose and more incentive to leapfrog. Meanwhile, Europe and the US remain cautious, with innovation still in the hands of incumbents. 6. Blockchain is a powerful coordination tool but not a solution on its own. Cross-industry alignment, shared standards, and willingness to trade across platforms are essential for scale. We are not there yet but the potential is massive.

Can digital money boost economic growth?

PANEL 5