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Private currencies

Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
in Politics & Debate
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?

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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I'm not sure how feasible it is but I was reading last week about a group of Dutch people that have produced their own currency, which can be directly converted into euro. It can be used to buy products and services in many Dutch supermarkets, shops, cafes etc...

    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...:)
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    It would depend on how closely it was regulated. Certainly before the 1930s at least most US banks were small family-owned businesses, so its possible, but if any financial problems came along everythign would go bang.

    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.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Good luck to anyone who tries such a thing I say... not many chances of success though. You might as well try to use Monopoly money.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Originally posted by Kermit
    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?
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    No you could not........

    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.............
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