Isn't most money used as purely digital anyway? When you get a mortgage, it's not like $300k of physical money changes hands.

So at a basic level quite a few (most) transactions are happening on a digital, abstract level anyway, so really the question is can blockchain be used to improve this model, and is there sufficient incentive for existing players to do so, or is there enough opportunity for someone else to come in and do so.

I think the former is what we're seeing banks start to explore today, while BTC and other cryptocoins have been exploring the latter.