Bernard Lietaer - The future of money

national currencies); changes in key interest rates; or fixing reserve requirements for the private banks. Ah these techniques really boil down to changing the maximum quantity of 'hat' currency that the private banks will be able to issue and at what cost.

Commodity-Backed Currency: A currency whose value is guaranteed by the physical availability of the commodity which backs the currency. The owner of a backed currency can normally ask for delivery of the physical good or service in exchange for the currency. Backed currency is typically issued by whoever owns the product or service accepted as backing. (e.g. 19th-century gold standard backed by gold; Time dollar backed by hours of community service.)

Currency: Synonymous with money, but emphasising the medium of exchange function of money.

Currency Boards: A monetary mechanism by which one national currency is issued backed one-to-one by a reserve currency. In other words, it is similar to a commodity-backed currency, but the backing is someone else's national currency. Argentina, Hong Kong and other countries have resorted to currency boards, where the backing is the US dollar.

Demurrage charge: A time-related charge on outstanding balances of a currency. Acts similarly to a negative interest rate, and was designed as a disincentive to hoard the currency. Savings would then occur in forms other than accumulation of the medium of exchange.

Silvio Gesell developed the theory that money is like a public service (e.g. public transport), and therefore a charge is justified. Both John Maynard Keynes and Irving Fisher provided theoretical foundation for this approach, and it was last implemented in the form of 'stamp scrip' in the 1930s.