From tap-to-pay cards and mobile wallets to stablecoins and CBDCs, digital finance is evolving fast.

What Type of Digital Money Are You Using?

If you're using a debit card, a bank app, or Apple Pay, you're already deep into the world of digital money. But not all digital money is the same. With so many new technologies, wallets, and payment systems appearing and some fading quickly, it's worth taking a step back to ask: what type of digital money are you actually using?

Let’s look at some of the key types of digital money in use now and what might be coming soon.

Digital Wallets

Digital wallets like Apple Pay, Google Pay and Samsung Pay are probably the most familiar form of digital money today. They're not a type of money themselves, but rather a way to access and use existing money stored in your bank account or linked card. In some countries, these wallets are part of much bigger platforms. In China, WeChat Pay and Alipay allow people to message friends, order food and pay for goods in the same app. These 'super apps' have turned payment into a seamless part of everyday life.

Even in Western economies, digital wallets are starting to play a larger role in how people manage their finances. Some wallets now offer budgeting tools, savings options, loyalty integration and even small loans. As more features get added, digital wallets may start to look more like a central financial hub, especially for younger users.

Bank Deposits: The Backbone of Digital Payments

Most digital payments today are still just bank transfers made faster and more convenient. When you tap your card or make a payment online, you're usually moving money that exists as a digital record in a bank's system. While it feels new, this has been the core of our financial system for decades. The big difference now is how easy it has become to use, thanks to faster networks, contactless tech and 24/7 access.

For businesses, especially SMEs, digital bank payments have helped streamline cash flow, automate invoicing and reduce reliance on cheques or manual reconciliation. With open banking regulations in many regions, bank account money is also becoming more interoperable. This allows users to share financial data securely across apps and platforms.

Stablecoins and Crypto: The More Experimental Edge

Stablecoins are digital currencies pegged to something steady, like the US dollar. The idea is that they offer the advantages of crypto, speed, decentralisation, without the volatility. But this hasn’t always worked. In 2022, a stablecoin called TerraUSD collapsed, losing almost all its value in just a few days. That failure showed how much risk can still be involved and why stronger regulation is being discussed globally.

Still, many stablecoins are now being used for fast international transfers, especially in places where traditional banking is slow or expensive. They’re particularly helpful for cross-border payments and may continue to grow in places underserved by banks.

Newer stablecoin projects are focusing on transparency and asset-backing, often publishing daily reports on their reserves. As regulation tightens, we may see a divide between highly regulated, trusted stablecoins and more fringe versions that operate in grey areas of the market.

It’s worth noting that this blog hasn’t focused on more speculative cryptocurrencies like Bitcoin or Ethereum. While these are widely discussed, they often behave more like investments than currency and carry considerable financial risk. Stablecoins are meant to be safer, but even they can fail, as the TerraUSD example showed. Caution is essential and regulation will be key to whether these options can offer real trust and utility in future.

Central Bank Digital Currencies (CBDCs)

Some countries are developing their own official digital currencies, known as CBDCs. China’s digital yuan is the most advanced example, already being tested in public trials. The European Union is also moving forward with a digital euro, set to be included in the European Digital Wallet by 2026. These currencies are issued by central banks and could offer a more stable and secure alternative to privately-issued digital money.

CBDCs aim to give people a public alternative to private digital payment systems, while increasing financial inclusion and making monetary policy more responsive. In some scenarios, CBDCs could help distribute government aid more efficiently, or even support programmable money, such as giving vouchers that expire or can only be used on essentials during a crisis.

However, CBDCs also raise questions. Will they be anonymous? Could they replace cash? How will they affect commercial banks? These are still open debates and the answers will likely vary by country.

Blockchain-Based Finance

Blockchain isn’t just for cryptocurrencies. Governments and companies are now experimenting with blockchain to issue digital bonds and financial products. These tools are still in the early stages, but the aim is to make traditional finance faster, more transparent and possibly even more secure.

For example, distributed ledger technology could help make humanitarian aid funding more accountable. In a future scenario, a digital coin could be created that can only be spent on approved goods, with a built-in expiry date to ensure funds are used quickly and correctly. This kind of controlled, transparent use of funds could be particularly useful in emergency relief or public service funding.

Financial institutions are also exploring tokenisation. The process of turning traditional assets like property or bonds into digital tokens that can be traded more efficiently. This could open up investment opportunities to a wider range of people, but it depends on regulation, user trust and the ability to scale safely.

How the Digital Finance Space is growing

Across 2025, expect to see progress on making international payments faster and more interoperable. The G20 and major financial bodies are pushing forward with systems that work across borders more smoothly, helped by common technical standards. Digital identity, real-time settlements, and smart contracts will also become more visible in the way we pay and move money.

There’s also increasing pressure to ensure these systems are inclusive. It’s not just about new tools, but about making sure people and businesses of all sizes can access them. That includes simplifying user experiences, providing multilingual support and ensuring regulations support, not hinder, innovation.

But not everything will land smoothly. Many of the technologies being explored still face barriers. For one, digital finance requires digital skills, not just to build systems, but to regulate, monitor and adapt them. There’s also a trust gap, especially when users don’t fully understand how their money is stored, moved, or protected.

The question of regulation looms large too. Will governments lead the way with cautious, step-by-step changes, or will tech companies continue to disrupt from the outside, like WeChat did by turning cultural habits into payment ecosystems? Likely, we’ll see a mix of both.

Looking forward

The landscape of money is becoming more digital, more layered and in some ways, more invisible. Whether you're an everyday consumer, a small business, or an accountant supporting both, it's worth paying attention to what’s powering your payments.

Join the IoA and prepare for the future of business

Sign up now to access the benefits of IoA Membership including 1400+ hours of training and resources to help you develop your data skills and knowledge. There are two ways to join: