Just so as you know, I am acquainted with the person who first coined the term ‘virtual currencies’. In fact, it was me!
How do I know? Because Wikipedia suggests that the term was coined (so to speak) in 2009 by CNN, whereas I wrote a Financial Times management report entitled ‘Virtual Currencies’ a good decade earlier, in 1999.
It was writing this when I realised the key element of all new kinds of money – whether they were barter currencies (like trade dollars), or local currencies (Brixton pounds), or social currencies (time credits), or loyalty currencies like beenz or flooz (both 1999 vintage) – is that they gave value to something that isn’t recognised as valuable by the global market.
I first realised what a controversial idea this was when, in 2000, I told a horrified audience of European bankers that big currencies “don’t measure very well”.
When, in 2011, I wrote a typology of new kinds of money for the Nesta thinktank, it all went well until I wanted to call the report More than Money. The technocratic economists who were in charge everywhere in those days baulked at the idea – in case they were ridiculed by their peers for suggesting that anything might be more than money.
Perish the thought!
Now we also have digital currencies like bitcoin or ethereum – ethereum at least has a purpose behind it, but bitcoin is fast becoming the sole preserve of gangsters, speculators and Trump-ites. Yet it is too important an invention to ignore, so the Bank of England has set up a committee to discuss launching a digital currency for the UK.
I’m sure they will – it is too Borisonian a project to ignore.
There is also the proposal for a digital currency for Scotland called the scotpound, suggested by the New Economics Foundation some years ago.
Both of these would issue legal tender digitally – presumably interest free, by giving it away.
I think they are both thoroughly civilised ideas and I hope they happen. The scotpound does not have to wait until statehood – the SNP could just go ahead with it now. In fact, the idea that only governments or banks can issue money is one of those canards that just won’t go away.
The danger is that britcoin could equally well be planned in the hope that it might attract speculative investors who are fed up with the value of other virtual currencies swooping up and down (Yes, I know someone has already launched a crypto currency called that).
This would potentially mean that the UK taxpayers might one day have to bail it out. It may not be possible to prevent all speculation, but it is important that designers remember that will not be the purpose of britcoin – which could and should be to provide a means to get spending power down the economy, quickly and easily.
Further advice is available from me any time – by the way: did you know I coined the term ‘virtual currencies’…?