Money reimagined: digital assets, AI and the future of finance

Summary

• Digital money is now a real actor in world economies, shifting focus to discussions of how it can successfully coexist with traditional currency
• Tokenisation is a current focus for organisations and institutions, presenting practical challenges as well as a pragmatic route to modernisation
• Regulation for digital money is expanding beyond anti-money laundering to cover conduct and governance
• Though AI usage is becoming more common, the FCA have emphasised that it must remain transparent, auditable and consistent with consumer protection principles
• Money has transformed many times throughout history, and success depends on confidence in infrastructure, trust and regulation

‘Money makes the world go round’, might sound like a cliché, but the adage captures a fundamental reality: economies run on how we define, measure and exchange value. While the form money takes has evolved significantly over the years — from precious metals to paper and digital tokens — the underlying requirement has stayed the same: trust.

What has shifted is the environment in which that trust operates. Digital money is no longer a niche concept; it has become central to conversations about both technology and the future of finance.

The discussion has also broadened well beyond cryptocurrencies. Today’s ecosystem includes tokenised money and assets, clearer regulatory frameworks and the growing use of AI in financial services. As these elements develop, the focus increasingly shifts to how various forms of digital money can coexist with established payment and settlement systems. 

Bitcoin and market evolution

Bitcoin still attracts the most public attention, but one of the more significant developments has been its increasing presence within mainstream financial markets.

The growth of exchange-traded products, particularly crypto exchange-traded notes, is one example. In the UK, the Financial Conduct Authority (FCA) permits these instruments, which are now available to both professional and retail investors through recognised exchanges, allowing exposure through established market infrastructure without the need to hold crypto-assets directly.

The supporting infrastructure has continued to develop. Custody arrangements are more mature than they were a few years ago, trading venues have become more robust, and established financial institutions are more active in areas such as custody and product structuring.

Taken together, these changes indicate increased interaction with established market practices, and Bitcoin can therefore be seen as interacting with market infrastructure and investment approaches. At the same time, its longer-term role within the financial system continues to evolve.

Tokenisation in financial services

Tokenisation, the digital representation of money, securities or other assets on modern platforms, is now a focus for both industry and policymakers.

In the UK, this includes the exploration of a digital pound by the Bank of England and HM Treasury, as well as a range of experiments with tokenised deposits and assets, often through regulatory sandboxes and pilot programmes.

For financial institutions, some of the challenges are practical rather than theoretical. How are assets held? Who has control? What happens if a platform fails? How are records reconciled with existing systems? What standards are used? How are customers protected?
These questions are not secondary details. They are central to whether tokenisation can work at scale. It is also being explored for its potential impact on how transactions are recorded, settled and reconciled, including possible effects on settlement speed, transparency and operational efficiency.

For firms, the considerations are often operational as much as conceptual, including governance, controls, custody arrangements and resilience. In that context, tokenised deposits may offer a pragmatic route to modernisation while remaining within established regulatory frameworks.

Programmable money

Alongside tokenisation, interest in programmable money has also been growing. In simple terms, it refers to payments or transactions that can be carried out automatically once certain conditions are met. In practice, this might look like a payment released upon goods arriving in a supply chain, an insurance payout triggered by verified data, or funds distributed with specific conditions attached.

Some of these already exist in different forms today. Direct debits, standing orders and automated payment instructions are familiar examples of conditional or scheduled payments. Smart contracts have further extended this idea in blockchain-based environments.

At the same time, wider use, especially in areas like central bank digital currencies, is still being explored. In the UK, the overall approach remains cautious, with any use of programmability expected to sit within clearly defined limits.

While programmability could reduce manual processes and improve efficiency, it also raises questions around legal enforceability, governance and system resilience, which are still being worked through. People will need to trust that programmable money can be used fairly, transparently and reliably.

Regulatory framework

The FCA is moving towards a fuller authorisation regime for crypto-asset firms under the Financial Services and Markets Act. From 2027, firms operating in or into the UK will need to be authorised to continue regulated crypto-asset activities.

This represents a move beyond a primarily anti-money-laundering registration regime towards a broader framework covering prudential and conduct requirements. Firms will be expected to demonstrate sound governance, credible business models and the ability to meet ongoing regulatory obligations.

The FCA has indicated that firms should begin preparing now. The broad direction is becoming clearer: digital assets are moving from the margins towards the regulated perimeter. That brings opportunity, but it also brings higher expectations.

Artificial intelligence

AI is becoming part of this wider discussion because digital money does not exist in isolation. It sits within a financial system that is becoming more automated, data-driven and operationally complex. AI is already being used across financial services in areas such as fraud detection, risk monitoring, customer support and compliance. Over time, it may play a greater role in routine financial actions, particularly where repetitive processes are involved. In some cases, AI may not initiate a financial transaction directly, but it may influence the process that leads to one.

For you

Be part of something bigger, join BCS, The Chartered Institute for IT.

That raises practical governance questions. If an automated system recommends or triggers an action, firms need to understand how that action was generated, which controls apply, and who remains accountable.

This does not remove the need for oversight. UK regulators, including the FCA, have emphasised that the use of AI must remain transparent, auditable and consistent with consumer protection principles.
Supporting this will require digital money systems that are reliable, interoperable, and governed by clear, accountable frameworks.

Conclusion

Money has changed many times before. It has taken the form of metal, paper, bank deposits, cards, electronic transfers and now digital tokens. Each stage has depended on more than the object or system itself. It has depended on confidence in the rules, institutions, and infrastructure that underpin it.

What does the future hold? Money, it seems likely, will not just change form. We may also see changes in how it is used. If AI agents begin to support or initiate transactions within defined permissions and controlled frameworks, money could be deployed and managed with less human involvement at every step. Some decisions, such as payments, pricing, or allocation, may become more continuous and automated. That could shift money from being only a passive store of value to something more active within digital systems.

The pound in your pocket may also exist as instructions in an AI agent’s wallet, used on your behalf within agreed rules and safeguards. In that context, money starts to look less like something you hold, and more like something that can be instructed, governed and acted upon.
If you are interested in learning about and shaping that future, consider joining the BCS Financial Services Specialist Group.