Private Money

A currency issued by a private party instead of a nation state or a central bank. Private money has a distribution problem.

Many forms of private money are a type of scrip or a provisional certificate or promissory note of funds subscribed a company entitling the holder to a redemption upon demand possibly subject to restrictions.

Many crypto assets allege to be a form of transnational private money in either their namesake or political imaginaries.

American Wildcat Banks

The America financial system, before the Civil War, had a large network of independent banks which all issued their own notes as a form of private money. This was known as the Wildcat banking era or the Free banking era. The system was not effective as rife with fraud and counterparty risk and was eventually phased out because of its problems. The dollar bank note was nationalized by The National Banking Acts of 1863.

Scottish Bank Notes

Scottish bank notes are a form or private money which are effectively promissory notes against the British pound sterling. The pound sterling is the national of currency of Great Britain and is accepted universally, however private banks in both Scotland Northern Ireland are allowed to issue a private form of money against the sterling. Scottish bank notes legally must be redeemable for pounds but the reverse process is not a requirement. For every private bank note issued there is a one-to-one backing with pounds held by the bank.

Company Scrip

Company scrip was a form of private money issued by corporations up until the early 1900s whereby a company would create a captive economy in which their employees would be payed in private money and could redeem this money for housing and goods within a private economy of a company town and company store.

Company scrip gave wildly asymmetric power to corporations and was deemed to be a predatory practice, and was banned in the United States and Europe in the mid 1900s.

See artificial demand.

Town Money

Private money still lives in on parts of the United States and Europe in a limited form known as town money, whereby a local city or town will issue its own private notes which can be spent within a limited geographic region to encourage captive spending within a local region and to encourage tourism. These notes encourage circulation of money within the town and goods and services may be discounted when using the private money as a means of encourage to promote local businesses and increase tourist spending with the town. Town money is generally issued on small scales and is overseen by a local town government.

Casino Tokens

Casino tokens are a form of scrip used by customers to play gambling games at casinos. They act as a form of captive economy that allows the casino to regulate the inflows and outflows of money used in its games. Like

Under United States law if a customer purchases casino chips, they have the right to sell them back to the casino for the marked value. The casino is restricted from allowing customers to use chips to pay for goods or services, however they can be given or sold to other customers in peer to peer transactions.

See artificial demand.


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