Digital money makes cashless society a reality

29 Jun 2017

Author: Matthew Hall

Photography:

Video:

Award-winning academic and entrepreneur Mike Aitken’s new venture – digi.cash – is a technology that creates encrypted digital representations of assets such as cash and shares, in the process revolutionising how such assets can be traded.
Tags 
  1. Category
  2. Class Styles - Category
Creative CommonsWe’d love you to share this content
University professor and entrepreneur Mike Aitken is the driving force behind the use of a technology that promises to turn the dream of a cashless society into a reality. 

Aitken, CEO and Chief Scientist of the Capital Markets Cooperative Research Centre (CMCRC) – Australia’s largest research centre for financial and health market technology – says when the technology was originally invented 25 years ago, there was no internet commerce and no smartphones.

“It was a great technology but before its time, now is the right time,” he says.  

In late 2016, digi.cash – a spin-off company of the Capital Markets CRC – launched the first digital Australian dollar, an electronic currency that is held on the user’s smartphone, computer or iPad. Just like cash, users can transfer the equivalent of coins and notes instantly between each other and at no cost.

“You take your fiat1.currency (Australian dollars or any other currency) and create an encrypted electronic token that represents fiat currency on a one-for-one basis,” Aitken explains. “One fiat dollar becomes one digi dollar. Your money is on your phone like cash is in your wallet. This makes it different to your typical bank apps and Apple Pay where what you see in the app is your ledger balance.” 

Aitken says Digi.cash has a number of advantages. “If you lose your wallet, your money is gone. If you lose your digitised wallet – your phone – we can work out which digi.cash you haven’t spent and put it back on your new phone.”

Turning trading inside out

Aitken believes digi.cash’s next opportunity has the potential to turn the trading market upside down.

“Currency is just one example of an asset we can digitise. There are many others,” Aitken says. “Because our company has previously built trading systems, surveillance systems and registry systems, we have the know-how and skills to turn this from a simple digital currency app into something far bigger.”

For example, Aitken says the same technology that digitises cash can also digitise shares. Digital share transactions can take middlemen – stock exchanges – out of the transaction circle. digi.cash also plans to build a digital share registry. 

“Essentially, what we are doing is setting up a trading system that will allow you to trade and settle simultaneously over any smart device. By trading and settling simultaneously, we in effect get rid of clearing and settlement fees,” says Aitken.

A record of success

Aitken has an impressive record building companies that have had significant impact on the global finance and health industry. His pioneering work in the finance industry has played a major role in making stock markets more transparent and less vulnerable to manipulation. 

Aitken led the development of SMARTS, a technology that detects unusual activity within financial markets that was purchased by NASDAQ, one of the world’s largest stock exchanges. He also founded SIRCA, a non-profit that built the Thomson Reuters Tick History, a product that provides trading data for every stock market in the world; and Lorica Health, a company that uses SMARTS-like technology to identify financial fraud and abuse in the health sector.

In 2016, Aitken was awarded the Australian Prime Minister’s Prize for Innovation for his work commercialising SMARTS.

CRCs open doors to business success

Much of Aitken’s work has come as CEO of Capital Markets CRC, a research initiative co-funded by government, universities and industry. Capital Markets CRC specifically commercialises and develops technology for financial and health industry markets while providing employment and research opportunities for graduate students.

Australian government—supported CRC programs invest in collaborative projects between industry, researchers and the community through a variety of well-funded grants made available for medium- to long-term industry-led ventures of up 10 years. There are also shorter, three-year programs.

“The CRC program is a massive opportunity for someone who backs themselves to have a go,” Aitken says. “But you don’t have the kind of success that we have had in five minutes. You have got to put years of work in.”

Aitken says Australia’s small population and large geographic distances have made the country an innovator and early adopter of technology. He notes it is no fluke that three of the five main technologies that run the world’s securities markets were invented in Australia as part of connecting the population. 

A key component of the CRC program is employing graduate students – a double-sided opportunity where students can complete research projects and contribute to real world, commercially focused enterprise.

“We currently have 115 PhD students at Capital Markets CRC and only 25 are funded by universities,” Aitken says. “The rest are fully funded by industry partners.” 

Students a source of great ideas

In addition to his CEO duties at the Capital Markets CRC, Aitken is Professor of ICT Strategy at Macquarie University’s Graduate School of Management. 

“The talent pool is amazing,” he says. “They say your staff are your best resource and I know that is true because [a lot of] our spin-off staff are students from universities. You wouldn’t believe how capable these people are. They can be world beaters if they are given a little bit of help.”

Aitken is confident of digi.cash’s future success. He says the company is in discussions with a foreign government about how to replace its fiat currency with digital currency.

“We are very close to becoming a cashless world,” Aitken says. “I think within five years fiat currency will be entirely replaced by digital currency, of which there will be a few.”

The digi.cash technology can be downloaded from the Apple App Store and Google Play and is currently free to use.