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Private currencies
Former Member
Posts: 1,876,323 The Mix Honorary Guru
Are private currencies feasible?
Should people be allowed to issue their own currencies?
Let's say the Bank of England were privatised and the state stopped being the sole creator of money. Could citizens having creating and issuing their own currency be successful?
Should people be allowed to issue their own currencies?
Let's say the Bank of England were privatised and the state stopped being the sole creator of money. Could citizens having creating and issuing their own currency be successful?
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so it is possible. feasibility and sustainability are other questions though. I only did 1st year Economics at Uni, so I have to pass that question over to someone else...:)
And then theres the problems of inflation, if anyone can print money then its worthless. Money is only worth something if there is trust, and that trust is based on solid gold. Unless you have gold then your currency doesnt have basis, and it wont be trusted, meaning you might as well use it as bog roll for all the good it is.
Post Bretton Woods, there really isn't a currency tied to gold anymore, hence why they're negotiable.
The issues with individual currencies would be practical:
- who would establish an exchange rate?
- would people be legally obliged to take it?
- why bother?
For a currency to be of any use it has to be acceptable to everyone, this is unimaginable with such a situation.
The currency has to be issued by a reliable central authority to be acceptable ie the state or central bank
Sometimes even a state is not seen as reliable enough to create a successful currency, individuals would stand no chance.............