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Money in the Twenty-First Century summary

Name: Money in the Twenty-First Century
Rating: 4 (30 reviews)
Author: Richard Holden

Richard Holden

Cheap, Mobile, and Digital

4 (30 ratings)

19 mins

Brief summary

Money in the Twenty-First Century explores the evolving landscape of modern finance, examining technological advancements, economic challenges, and policy implications to offer a comprehensive understanding of how money functions in today's rapidly changing world.

Topics

Investments Capitalism & The Free Market US Economics Big Data The Psychology of Money Digital Transformation

Table of Contents

Money in the Twenty-First Century
Summary of 7 key ideas

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What’s in it for me? Understand how digital technology, low interest rates, and private currencies are reshaping global monetary systems.

Money is changing in ways that most people didn't see coming. It's no longer just notes in a wallet or numbers in a bank account. It's embedded in apps, managed by algorithms, and increasingly shaped by forces beyond traditional institutions. What once felt stable and predictable is now evolving rapidly, driven by shifts in technology, policy, and global behavior.

In this Blink, you'll discover how three powerful trends have redefined what money is, how it moves, and who controls it. These forces are already reshaping economies and financial systems around the world. To understand where this change is heading, it helps to start with when it truly began – and how a few major shifts in 2008 quietly set new rules for modern money.

Why modern money is no longer what it was

In 2008, three developments quietly emerged that would later upend the foundations of global finance. Interest rates in wealthy countries fell to near zero. Smartphones became widespread. And Bitcoin was born. These trends marked the beginning of a new era in how money is created, moved, and controlled.

The drop in interest rates was the first clear break from the past. In response to the global financial crisis, central banks slashed borrowing costs to jump-start struggling economies. But the real surprise came afterward: rates stayed low for years, even as conditions improved. This shift reflected deeper changes in how the economy works. Today's leading firms can scale globally with much less capital than older industrial giants. At the same time, aging populations and rising inequality have led to excess global savings. With more money chasing fewer investment opportunities, the natural rate of interest has collapsed. That explains why cheap money has become the default, not the exception.

Meanwhile, the mobile phone evolved into an everyday financial tool. Within a few years of the iPhone's release, digital payments had become routine in much of the world. From grocery stores in Europe to informal markets in East Africa, people began using apps and mobile wallets to pay, transfer, and manage money. They no longer needed a physical bank.

Then came Bitcoin. Built on a decentralized ledger called blockchain, it introduced a new model: digital money that operates outside government systems. What started as a niche experiment has grown into a vast ecosystem of private digital currencies with real economic weight and political attention.

These three forces – cheap, mobile, and digital – are the foundation of today's monetary shift. You'll take a closer look at each of them in the sections ahead. But first, it's worth understanding what happens when cash itself starts disappearing from everyday life.

The world is moving beyond cash

In 2010, almost 40% of Swedes used cash for their most recent purchase. By 2020, that figure had dropped to just 9%. That kind of shift signals a deep change in how a modern economy handles money. Across much of the developed world, and increasingly in developing regions too, cash is quietly being replaced by faster, safer, and more trackable digital alternatives.

The move away from physical currency is largely driven by technology. With tap-to-pay cards, smartphones, and wearable devices, transactions are now instant and seamless. They're often more secure too. In countries like Sweden and Australia, infrastructure like real-time payments systems and mobile payment apps has made digital spending effortless. This isn't a theoretical future; it's already here. What used to require an ATM or wallet now just takes a phone.

Mobile money is reshaping access to finance

In rural Kenya and parts of Afghanistan, mobile phones have quietly done what traditional banks struggled to achieve for decades – they've given people a safe, practical way to handle money. In places with weak infrastructure and limited access to physical banking, mobile payment systems have become essential. And that's redefining what it means to participate in a modern economy.

At the core of this shift is the merging of two powerful technologies: the mobile phone and digital finance. What started as a convenience in wealthier countries has become a foundation for financial inclusion in developing regions. Randomized trials in Kenya show mobile money has helped reduce poverty, particularly among women. In Afghanistan, studies found that paying police officers through mobile systems cut down corruption and increased morale. These stories show how digital access to money can reshape social and economic behavior.

Cryptocurrency is challenging state control of money

In a small New Hampshire town, frozen yogurt shops accept bitcoin, and residents gather to debate the merits of different cryptocurrencies. It sounds like a novelty, but it captures something real: private digital currencies have moved from fringe experiments to globally traded assets worth trillions.

The movement began in 2008, when someone using the name Satoshi Nakamoto published an online paper. It outlined a way to create digital money without banks or governments. That proposal became Bitcoin – the first cryptocurrency. It sparked a wave of innovation that now challenges the traditional state monopoly on money.

Govcoins are states’ answer to digital currency disruption

When Facebook announced plans in 2019 to launch its own global digital currency, it set off alarms among policymakers, especially in Washington. The currency was first called Libra, later renamed Diem. The idea of a private tech platform with billions of users issuing its own money raised serious concerns about financial stability, regulatory oversight, and even geopolitical influence. Treasury Secretary Janet Yellen was among those who pushed back, and without U.S. support, the project stalled. But it sent a clear message: powerful private actors were no longer just proposing alternatives to government money – they were ready to launch them. In response, central banks around the world began accelerating their own plans to issue digital currencies.

Central bank digital currencies, often called govcoins, are now the public sector's answer to the rise of crypto and private digital money. These aren't speculative assets or tokens backed by startups. They're digital versions of national currencies, issued and managed by central banks. The aim is to keep the benefits of state-backed money – stability, accountability, and regulation – while adapting to a world where money increasingly lives on screens, not in wallets.

Digital currencies are redrawing global financial power

The U.S. dollar has long held a unique position in the global financial system. It’s the world’s most trusted store of value and the dominant reserve currency, used in everything from international trade to central bank holdings. But as digital currencies gain ground, this advantage – often called the exorbitant privilege – is no longer guaranteed.

A key threat is coming from China. With its digital yuan, already introduced to hundreds of millions of citizens, China is aiming to shape the future of money on its own terms. Unlike traditional international finance, which relies on institutions like SWIFT or the U.S. banking system, a digital currency backed by the Chinese state could enable entirely new payment networks, outside the reach of Western regulators. That would reduce the global reliance on the dollar and make sanctions and financial restrictions less effective. It’s a geopolitical shift disguised as a technical upgrade.

Cheap money is rewriting economic rules

In the early 1980s, interest rates in the U.S. reached over 15 percent. Four decades later, rates sat near zero for over a decade – despite record government spending and major central bank interventions. This dramatic shift signaled a deeper structural change in the global economy, one that's reshaping how money flows, how governments borrow, and how financial bubbles form.

Today's persistently low interest rates are the product of powerful long-term forces. New technologies allow businesses to grow massively with minimal capital. Think of how companies like Facebook and Google were built on code, not factories. At the same time, global savings have surged. Aging populations in advanced economies and rising inequality have concentrated wealth in fewer hands. And wealthy individuals tend to save more than they spend. These dynamics have driven down the natural cost of borrowing, leaving central banks with little room to manoeuvre.

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What is Money in the Twenty-First Century about?

Money in the Twenty-First Century (2024) explores how technological shifts are reshaping the nature and function of money. It examines the rise of digital currencies, mobile payment systems, and low-interest economic environments, highlighting their impact on financial institutions and global economies.

Who should read Money in the Twenty-First Century?

Professionals exploring the future of finance
Tech-savvy minds interested in digital currencies
Anyone seeking insight into modern money

About the Author

Richard Holden is a Professor of Economics at the University of New South Wales and President of the Academy of the Social Sciences in Australia. He earned his PhD from Harvard and has taught at the University of Chicago and MIT. His other notable works include Australia’s Pandemic Exceptionalism and the co-authored textbook Principles of Economics.

Categories with Money in the Twenty-First Century

Money & Investments Technology & the Future Economics

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