4 ms·

I'm curious how competing currencies would work in practice. Are businesses required to accept any currency? Can anyone create their own currency? How do you

• kansface 12y ago
  1. No. Businesses (by federal law), aren't even required to accept dollars now. 2. Yes, but would you use Honest Achmed's Used Cars and Dollars? 3. (Private) Ratings Agencies would rate currencies and maybe each other. The market picks the winner based on trust, convenience, or whatever else it cares about. In practice, I'd expect an 80/20 rule. Two currencies would make up 80% of all transactions in a given region, with a rather large tail (gold/silver/basket of commodities backing, fixed exchange rates, etc). Multiple currencies is nearly unworkable with paper money, but quite trivial with digital paper money.
• roymurdock 12y ago
  Kansface's reply is really good. Hayek also wrote a great paper on the subject in 1990. In it he quite presciently predicts the current conundrum of the euro zone and makes the case for competing physical currencies. He realized that this would never happen in his lifetime but went through the the intellectual steps nonetheless. Virtual currency could make his thesis possible. Check it out if you're interested: http://mises.org/library/denationalisation-money-argument-refined http://mises.org/library/denationalisation-money-argument-re...