Doing away with cashPredicting the future of money

  • The economic experiment known as monetarism—limiting the supply of money in order to control inflation—was abandoned when it became clear it was impossible to establish a precise definition of the money supply.
  • In Kenya, hundreds of businesses, including the leading utilities, accept payments through a mobile-based system known as M-Pesa ( pesa means “money” in Kiswahili).
  • The software in mobile phones and in the retailer’s payments system could instantly work out the correct exchange rate and adjust the bill accordingly.
  • The temptation for some communities to keep issuing money would certainly be great; those electronic currencies might suffer rapid depreciation.
  • Nor will central banks willingly lose control of the money supply, with all the potential adverse effects of economic management.

Before Babylon, Beyond Bitcoin: From Money that We Understand to Money that Understands Us. By David Birch. London Publishing Partnership; 264 pages; £22.50.
PEOPLE use money every day and yet struggle to understand it.

@dgwbirch: Predicting the future of money Wowza! The Economist reviews my new book “Before Babylon, Be…

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Doing away with cashPredicting the future of money