Why We Have To Rethink Money?

The dysfunctions of the present monetary system derive mainly from:

•  the legal tender status for central bank-created currency,
•  the monopolization of credit by the banking cartel,
•  the lack of an operational measure of value and unit of account that is independent of political currencies.

The keys to transcending the monetary confusion, and liberating the exchange process, lie in:

•  the separation of the various functions that money is supposed to serve,
•  the democratization and decentralization of the exchange process,
•  the definition and use of an objective, concrete, international standard unit of account.

We believe to know that money is:

•  a medium of exchange,
•  a store of value, 
•  a measure of value. 

But, these three functions are mutually contradictory. If money is a medium of exchange, it needs to be spent, but if it is a store of value, it should be held. And if money is a credit instrument, there should be some way of assigning a value to it using some objective measure of value. 

A currency should not itself be the measure of value. What we need is to segregate these three functions in order to optimize and restore honest dealing to the reciprocal exchange process.

Since the digitization of financial systems, the financial sector employes some of the best physicists, mathematicians, and lawyers to help create a sophisticated but non-transparent financial system that even highly educated people can hardly understand.

This complexity makes any meaningful debate on financial reforms more difficult, and the lack of transparency prevents a real change from happening.

Financial crises, such as the subprime crisis, are not a natural disaster or the inevitable consequence of human greed, but the result of a digitalized, world-wide distributed, and networked financial system that has gotten out of control.

At the same time, the digitization is the key to the transformation of the financial system to the benefit of all. We should avoid a further waste of resources on the increasingly complex regulation of the financial system, simply because regulation will not prevent the next financial crisis.

I see the paradigm shift, triggered primarily by the overhyped technologies and in most cases overestimated ideas of the Crypto Universe, as a historic opportunity to reinvent the financial industry by rethinking money.

https://reinventingmoney.com/

https://www.project-syndicate.org