Money Without Boundaries

Appendix AThe Future of Money – A Credit-Based Society

Money always has been, and always will be, credit or a claim on an asset. In the future, there will be no “money;” we will have a credit-based society or the complete denationalization of money that Friedrich Hayek foresaw. Unlike Hayek's vision of banks issuing competing currencies, the denationalization of money will take place via the transparent securitization of an individual, at the individual level. New technologies will facilitate his vision.

Each person and entity is a unique issuer of currency. Each currency has infinite subunits, each with its own value, creating a world with infinite currencies. Money serves as a store of value, a medium of exchange, and a unit of value. For the infinite creators and purchasers of money, these roles are best served through complete decentralization. Debt is the creation of credit, which is the creation of money. The decentralization and commoditization of credit creation becomes the basis of currency: one facility, infinitely broken down into units of risk, dynamically market priced, and sold to the market in groups.

Economic Theory

1. Market participants, acting in their own self-interest, make a market more efficient.
2. Investors are risk averse.
3. Markets reflect all available information.
4. One can borrow and lend at the risk-free rate.
5. Investors hold cash for investment and transaction reasons.
6. One should be a borrower or a lender, not both.
7. The relevance of capital structure is ...