The biggest challenge for uti is how to use digital technology to facilitate payments and transfer value between parties.
For a system to work, it needs to be secure, and the key is ensuring that users don’t have to use passwords to access their account or even to sign in.
But there are plenty of risks to using uti.
The first is that it could be used by criminals and hackers.
There are also risks to the system from hackers and fraudsters who may try to manipulate the system.
And then there’s the potential for privacy issues.
“There are plenty people who are going to get the wrong impression that uti transactions are going through a secure channel, but it’s not,” Professor Murnaghan says.
“You’re actually signing in to a bank account through a login that’s not necessarily secure.”
In some cases, a user’s bank account could be shared with others in the same household.
And as with most digital currencies, the number of users could be limited to ensure privacy.
And if that wasn’t enough, the payments system would also have to be designed to ensure that all parties who use the system are aware of what’s going on.
Professor Marnaghan says uti has a bright future in the financial services sector, but the first steps are needed before the system can be rolled out across the country.
“It needs to have the infrastructure to be fully-featured, with both public and private payments, and it needs a robust identity management system so that all the information is available for everyone to see,” he says.
It’s also important to keep in mind that utis don’t necessarily require a centralised exchange mechanism, which could mean users don.
Instead, uti could be managed by users using their own accounts and wallets, or by third-party developers.
Professor Macpherson says utis are particularly useful in developing countries because they are less expensive than traditional payment systems.
“In the US, for example, the typical transaction takes around $2,000 to $4,000.
If you take that away, you’re left with a payment system that’s about 20 times cheaper than the current system,” he explains.
“But it also has a high transaction cost, because you’re spending money to create something that you don’t actually own, and you can’t exchange it for anything else.”
“In other words, it’s a way of transferring value in a relatively small space, rather than moving it across the world to pay someone, or to send it to a friend or family member.”
Professor Macherty says the key to uti’s success lies in the fact that its underlying technology is so secure.
“Its value is the same whether it’s used for cash or credit, or credit or cash,” he said.
“The difference is that its value is stored in a way that’s very secure.”