Necessary Conceptual Approach
The evidence of money is a digital file
All financial service products are evidenced by digital files
Any entity with adequate information processing technology can perform the functions of a “bank”
The most potent future “banking” competitors may be software companies
We found such a broad conceptual approach to be necessary because of an underlying technological “commonality,” which will be the first of several such commonalities I will be mentioning today.
Money is, and always has been, a part of a belief system. To use various terms from metaphysics, it is a “conceptual entity;” it is a piece of “consensus reality.” It is what the medieval scholastics referred to as “ens mentale” (mental entity), as opposed to “ens reale” (real entity) -- such as a table. In that sense, it is borderless -- like cyberspace, assuming one thinks of cyberspace as being something more than a metaphor.
At different times in history and in different places, there have been many forms of evidence of money. Today, money -- whether it is legal tender or e-money -- is principally evidenced as a digital file, and any money can be made into a digital file. Indeed, any financial product can be evidenced as a digital file. Further, any entity possessing adequate information processing technology can perform the functions of a “bank” (putting aside the legality of their doing so). Indeed, it is a fear not infrequently expressed by traditional bankers that their most potent future “banking” competitors may be software companies.
In sum, one of the key reasons why we need to abstract to the level of functions is that this commonality of potentially being evidenced as a digital file underlies every financial service and product -- regardless of the type or location of its source.