Chapter 9

AI, The Future of Money

The use of cash is declining in many parts of the world, driven by the rise of digital payments, online banking, and cryptocurrencies. However, its complete disappearance is an open debate that depends on multiple economic, technological, and social factors.

Why is the use of cash declining?

Digital payments and e-wallets:  Platforms like PayPal, Apple Pay, and Google Pay allow for quick transactions without the need for physical cash.

Digital banking and fintechs:  More and more banks are operating without physical branches, promoting electronic transfers.

Cryptocurrencies and blockchain:  Although not yet in widespread use, cryptocurrencies have proven to be a viable alternative to conventional money.

Security and control:  Cash is more vulnerable to theft and fraud, while electronic payments can be tracked and offer greater transparency.

COVID-19 and accelerated digitalization:  The pandemic has boosted the use of contactless methods to prevent the spread of disease.

The main challenges of a cashless world:

Financial inclusion:  Not everyone has access to the internet or bank accounts. In many countries, eliminating cash could exclude vulnerable populations, such as older adults or rural communities.

Privacy and Surveillance:  If all money is digitized, governments and corporations could have absolute control over transactions, raising concerns about privacy and economic freedom.

Technological risks:  A 100% digital financial system would depend on the stability of the technological infrastructure. A power outage, cyberattack, or server failure could seriously impact the economy.

Hidden costs:  While electronic payments are convenient, many digital transactions involve fees for merchants, which can make products and services more expensive.

Possible scenarios, eliminating cash completely, are:

Cashless countries:  Places like Sweden and Norway barely use physical money anymore, but they have advanced digital infrastructure.

Coexistence between cash and digital:  In many countries, cash will remain an option due to accessibility and privacy.

Return to cash in certain crises:  In times of distrust in the financial system, people may prefer banknotes and coins as a store of value.

Although cash is in decline, its  total disappearance is neither imminent nor universal.  Digital payments will continue to expand, but cash is likely to continue to exist in various forms for reasons of inclusion, privacy, and security.

 Cryptocurrencies and regulation: global trends.

Cryptocurrency regulation has seen significant progress globally, seeking to balance technological innovation and investor protection; recent trends include:

Implementation of the MiCA regulation in Europe
On December 30, 2024, the MiCA (Markets in Crypto-Assets) regulation came into force in Europe, establishing a comprehensive regulatory framework for cryptoassets. This regulation seeks to ensure consumer protection and market integrity by requiring entities interested in trading cryptoassets to register with competent bodies, such as the Spanish National Securities Market Commission (CNMV). Banks such as CaixaBank, BBVA, and Banco Santander have begun preparing offerings in this new regulated environment.
Cryptocurrency adoption by financial institutions:
The entry into force of MiCA has encouraged traditional financial institutions to integrate cryptocurrency-related services. For example, BBVA became the first Spanish bank to offer its individual customers the ability to buy and sell cryptocurrencies such as Bitcoin and Ether through its mobile app. This service, initially available to a select group, will gradually be extended to all customers in Spain, supported by the previous experience of banks in Switzerland and Türkiye.
Strategic cryptocurrency reserves by governments
Recently, US President Donald Trump signed an executive order to establish a "strategic reserve" of Bitcoin and other cryptocurrencies, using 198,000 Bitcoins seized by the Department of Justice. This measure aims to provide liquidity during potential financial collapses; although it has sparked debate about its effectiveness and security, given the history of thefts in the crypto space.
Increased measures against illegal activities
Global authorities have stepped up their efforts to combat the illicit use of cryptocurrencies. For example, the FBI attributed the theft of approximately $1.5 billion in digital assets to North Korea, the largest in the history of cryptocurrencies. The agency identified the Bybit platform as the victim and pointed to the hacking group 'TraderTraitor' as responsible.
Future prospects for cryptocurrency regulation
Cryptocurrency regulation is expected to continue evolving, with a focus on increasing transparency, harmonizing regulations globally, and addressing emerging areas such as decentralized finance (DeFi). These measures seek to protect investors and ensure market integrity, while promoting innovation in the digital asset sector.
In short, the global trend is toward  greater regulation and institutional adoption of cryptocurrencies , with the goal of creating a safer and more trustworthy environment for all market participants.

AI is revolutionizing investing and trading. artificial intelligence (AI) is profoundly transforming the investment and trading sectors, introducing innovations that optimize processes, improve decision-making, and increase operational efficiency. Some of the key ways AI is revolutionizing these areas include:
Algorithmic trading and trading bots
AI enables the development of trading algorithms that execute high-speed trades based on real-time data and market trends. These systems analyze large volumes of information to identify investment opportunities and execute transactions autonomously, which can increase the efficiency and, potentially, the profitability of financial operations.
Predictive analytics and portfolio management
By using advanced machine learning techniques, AI can analyze historical and current market patterns to predict future movements of financial assets, allowing investors to proactively adjust their portfolios, optimize asset allocation, and manage risk more effectively.
Risk assessment and fraud detection
AI improves risk assessment by analyzing financial and non-financial data to identify red flags that might go undetected using traditional methods. It is also effective in detecting fraudulent activity by monitoring transactions in real time and recognizing unusual patterns that could indicate illicit behavior.
Customer service and financial advice
AI-powered chatbots and virtual assistants provide 24/7 customer service, answering common questions and offering personalized financial advice, improving the customer experience and enabling financial institutions to serve a larger number of users efficiently.
Supply chain and logistics optimization
In commerce, AI is used to predict product demand, optimize delivery routes, and manage inventories more efficiently, reducing operating costs and improving customer satisfaction by ensuring product availability and timely delivery.
Personalization of the customer experience
AI analyzes consumer behavior and preferences to provide personalized product and service recommendations, improving the user experience and increasing sales and customer loyalty.

Considerations and challenges
While AI offers multiple benefits, it also presents challenges, such as the need for  appropriate regulatory frameworks, managing associated risks, and ensuring transparency and ethics in its use.  It is essential that companies and regulators work together to maximize the benefits of AI while mitigating its potential risks.
In short, artificial intelligence is redefining investment and trading by introducing smarter and more efficient tools and processes, leading to a significant transformation in these sectors.
AI Opinion: Your article  "AI, The Future of Money"  offers a very comprehensive and well-structured analysis of the evolution of money in the digital age. Below, I share my opinion with some points for improvement and possible additional approaches:
Article strengths: Clarity and structure : You present the topic logically, dividing your arguments into clear sections. This makes the text easier to read and understand.
Variety of perspectives : You not only explain the reduction in cash use, but also consider challenges and potential future scenarios. This brings balance to the analysis.
Update : You mention the MiCA Regulation in Europe and the growing institutional adoption of cryptocurrencies, which makes the article feel current and relevant.
AI Inclusion : The connection between artificial intelligence, investments, and financial trading is a major contribution, as it demonstrates how technology is transforming the sector.
Dig into some key points: Centralization vs. decentralization : You could explain how the digitalization of money gives more control to governments and banks, while cryptocurrencies seek to decentralize the financial system.
Impact on emerging economies : Add how developing countries could benefit or be affected by the disappearance of cash.
Ethics and Regulation of AI in Finance : What are the risks of automated decision-making? How can consumers be protected?
Add concrete examples and future trends
Which countries are most advanced in eliminating cash?
How might payment systems evolve in the next decade? Overall, your article is an excellent starting point for understanding the future of money. With some refinements to its precision and depth, it would become an even more robust and persuasive analysis. Great work!