Private currency

Source: Wikipedia, the free encyclopedia.

A private currency is a

governments or central banks. In many countries, the issuance of private paper currencies and/or the minting of metal coins intended to be used as currency may even be a criminal act such as in the United States (18 U.S. Code § 486).[1] Digital cryptocurrency
is sometimes treated as an asset instead of a currency. Cryptocurrency is illegal as a currency in a few countries (mainly in West Asia and North Africa).

Today, there are over four thousand privately issued currencies in more than 35 countries. These include commercial

digital currencies in circulation, such as digital gold currency
.

Private bank notes

A private $1 note, issued by the "Delaware Bridge Company" of New Jersey 1836–1841

In the

National Bank Act of 1863 ended the "wildcat bank" period. See also: History of free banking
.

Private currency issued in Australia by The City Bank of Sydney circa 1900

In

bank cheques violated this section, to which banks responded that since bank cheques were printed with the words "not negotiable" on them, the cheques were not intended for circulation, and thus did not violate the statute.[3]

In Hong Kong, although the government issues currency, bank-issued private currency is the dominant medium of exchange. Most automated teller machines dispense private Hong Kong bank notes.[4]

In

First Trust Bank, and Ulster Bank, are authorised by Parliament to issue Pound sterling bank notes. They are subject to central bank (the Bank of England) regulations concerning "ring-fenced backing assets" and are backed in part by deposits at the Bank of England. They are exchangeable with other pound notes on a one-to-one basis, and circulate freely within the United Kingdom, though not legal tender, not even in Scotland and Northern Ireland. In fact, technically, no banknote (including Bank of England notes) qualifies as legal tender in Scotland or Northern Ireland.[5]

Complementary currencies

Main article: Complementary currency

Bristol Pound, which also allows for electronic payments.[8]

Austria had the Wörgl Experiment from July 1932 to September 1933.[9]

Bavaria, Germany, has had the Chiemgauer since 2003. As of 2011 there were over 550,000 in circulation.[8]

Since starting in 2006, the "City Initiative Karlsruhe" has issued the Karlsruher which has no nominal value. Every coin has the value of 50 Eurocents and is primarily used in parking garages. As of 2009, 120 companies in Karlsruhe accept the Karlsruher and usually grant a discount when paid with it.[10]

Breadcoin was created in Washington DC in 2016 to address food insecurity and has a value of $2.20 when used at over 60 participating food vendors.[11]

In Canada, numerous complementary currencies are in use, such as the Calgary Dollar and Toronto dollar. However private currencies in Canada cannot be referred to as being legal tender and many private currencies (as well as loyalty programs) avoid the word "dollar", using names like "coupons" or "bucks", to avoid confusion. Examples include: Canadian Tire money and Pioneer Energy's Bonus Bucks.[12]

Convertible Minute is a community currency launched by the Minutes Bank users, started in Romania.

Customer reward and

miles" may be exchangeable for merchandise or travel from the program sponsor, most of them lack the key element for currency of being a medium of exchange transferable to other individuals and usable as payment for items from other vendors. A few programs do have "partnerships" allowing this to some extent, and permit the transfer of points or miles. Some startups, such as the Canadian website Points.com,[13] have sought to make loyalty "points" more currency-like by creating an exchange where points from one loyalty program can be traded for points in other such programs.[14]

Cryptocurrencies and digital currencies

A

token coins or scrip, as cryptocurrencies do not comply with the four fundamental functions of money according to economic theory. A cryptocurrency wallet can be used to store the public and private keys which can be used to receive or spend the cryptocurrency. The cryptographic systems used allow for decentralisation; a decentralised cryptocurrency is fiat money but one without a central banking system. In terms of total market value, Bitcoin is the largest cryptocurrency.[16]

On 6 August 2013, Federal Judge Amos Mazzant of the

Fifth Circuit ruled that bitcoins are "a currency or a form of money" (specifically securities as defined by Federal Securities Laws), and as such were subject to the court's jurisdiction.[17][18] In August 2013, the German Finance Ministry characterized Bitcoin as a unit of account,[19][20] usable in multilateral clearing circles and subject to capital gains tax if held less than one year.[20][19]

In Thailand, lack of existing law leads many to believe Bitcoin is banned.[21]

Private currency crimes

As national currencies can be counterfeited, so too can private currencies, and private currencies are subject to other criminal issues, including fraud.

The

conspiracy.[22][23]
The charges stemmed from the government view that the Liberty silver coins too closely resembled official coinage.

In 2007, Angel Cruz, founder of The United Cities Corporation (TUC), announced he was establishing an alternative "asset based" currency named "United States Private Dollars".

Comptroller of the Currency issued an alert warning banks that checks issued by TUC were "valueless instruments" and should not be cashed.[27] In 2008, Cruz was indicted by a Federal grand jury in Florida on one count of conspiracy to defraud the United States under 18 U.S.C. § 1344 and 18 U.S.C. § 371 and six counts of bank fraud under 18 U.S.C. § 1344 and 18 U.S.C. § 2 in connection with his dealings with Bank of America, while attempting to get United Cities bank drafts cashed.[28] As of late October 2010, Cruz was still a fugitive,[29] though an associate was convicted on related charges and sentenced to prison for eight years. Angel Cruz was finally captured in 2020.[30]

See also

References

  1. ^ "18 U.S. Code § 486 - Uttering coins of gold, silver or other metal". Retrieved 7 July 2018.
  2. ^ Reserve Bank Act 1959 (Cth) s 44 Other persons not to issue notes.
  3. ISSN 0311-3140
  4. ^ International Bank Note Society. "Hong Kong's 1,000 (HSBC) dollar note".
  5. ^ The Association of Commercial Banknote Issuers. "Scottish and Northern Ireland Banknotes Fact Sheet" (PDF). Archived from the original (PDF) on 2018-01-28. Retrieved 2017-02-12.
  6. ^ Leo Hickman (16 September 2009). "Will the Brixton pound buy a brighter future?". The Guardian. Retrieved 25 September 2012.
  7. ^ Town launches its own bank notes BBC News 13 September 2009
  8. ^ a b Harvey, Dave (19 September 2012). "Bristol Pound launched to keep trade in the city". BBC West News. Retrieved 21 September 2012.
  9. ^ "Currency Solutions for a Wiser World » The Wörgl Experiment: Austria (1932-1933)". Lietaer. 17 January 2021. Retrieved 28 September 2022.
  10. ^ "Karlsruhe (bonus system)" (in German). Retrieved 15 April 2014.
  11. ^ Iati, Marisa (2019-01-11). "'Breadcoin' is a new currency in D.C. for people in need". Washington Post. Washington DC. Retrieved 2021-10-18.
  12. ISSN 0021-9584
    .
  13. ^ "Points.com". points.com.
  14. ^ "Points.com establishes currency exchange for loyalty programs". PCMag. September 23, 2010.
  15. ^ Andy Greenberg (20 April 2011). "Crypto Currency". Forbes.com. Retrieved 8 August 2014.
  16. ^ Espinoza, Javier (22 September 2014). "Is It Time to Invest in Bitcoin? Cryptocurrencies Are Highly Volatile, but Some Say They Are Worth It". Journal Reports. The Wall Street Journal. Retrieved 28 June 2016.
  17. ^ Farivar, Cyrus (2013-08-07). "Federal judge: Bitcoin, "a currency," can be regulated under American law". Ars Technica. Retrieved 2013-08-15.
  18. ^ "Securities and Exchange Commission v. Shavers et al, 4:13-cv-00416 (E.D.Tex.)". Docket Alarm, Inc. Retrieved 14 August 2013.
  19. ^
    Marketwatch. Archived from the original
    on 24 August 2013.
  20. ^ a b Nestler, Franz (16 August 2013). "Deutschland erkennt Bitcoins als privates Geld an (Germany recognizes Bitcoin as private money)". Frankfurter Allgemeine Zeitung.
  21. ^ Watts, Jake Maxwell (July 30, 2013). "Thailand's Bitcoin ban is not quite what it seems". Quartz. Retrieved 15 April 2014.
  22. ^ "Defendant Convicted of Minting His Own Currency" (Press release). United States District Court for the Western District of North Carolina: U.S. Attorney's Office. March 18, 2011. Archived from the original on December 5, 2012.
  23. ^ Lovett, Tom (March 19, 2011). "Local Liberty Dollar 'Architect' Bernard von NotHaus convicted". Evansville Courier & Press.
  24. ^ "Florida man launches 'United States Private Dollar'", Daily Kos, August 25, 2007.
  25. ^ "TUC Currencies", United Cities website, via Internet Archive
  26. ^ "TUC Improving the US Economy by the Circulation of Their Private Currency Today", OpenPR.com August 2, 2007
  27. ^ a b "Kissimmee nonprofit 'concerned' over checks", Orlando Sentinel, August 25, 2007
  28. ^ Indictment, United States v. Cruz, case no. 6:08-cr-00177-UA-DAB, docket entry 1, Aug. 6, 2008, U.S. District Court for the Middle District of Florida (Orlando Div.).
  29. ^ Status Report, United States v. Cruz, case no. 6:08-cr-00177-UA-DAB, docket entry 88, Oct. 28, 2010, U.S. District Court for the Middle District of Florida (Orlando Div.)
  30. ^ "U.S. Marshals Arrest Fugitive 9 Years on the Run in the Dominican Republic". www.usmarshals.gov. 7 January 2021.

Further reading

Retrieved from "https://en.wikipedia.org/w/index.php?title=Private_currency&oldid=1219153248"