What if Money had a (s)cent?

What if Money had a (s)cent?
Photo by Jonny McKenna / Unsplash

Sorry for the pun 😎 - but in all fairness it isn't like I just dreamed it up (or picked up the saying back home where I was born - close to fishermen and farmers known to be rather adept to bartering); the Roman emperor Vespasian in fact is attributed the quote pecunia non olet (money do not stink - meaning it does not matter how you came about the green bags, their value is the same)!

But just stop of a second and consider what would be, if money did in fact ‘stink’!

What would this ‘stink’ be? You wouldn’t actually suggest bank notes to be dipped in some sort of fragrance now, would you? Certainly not! But let's leave the implementation for now - no matter how much I'd like to focus on the technical side of things.

First of all, tax evasions would be a thing of the past! Every single euro, dollar, renminbi created will carry a ledger and when you receive 5 cents, each cent will have your name attached to the ledger.Should you later that same day hand two of those cents on to someone else, their name will be added to the ledger of each of those two cents. With me so far?

Secondly, stealing money will be next to impossible! With your name imprinted on every cent it will be impossible for anyone to forward 'your' money to a third body acting – at least doing so 'in good faith'.

Finally money can be "programmed" for particular spenditure. The traditional helicopter money being spent by governments in crisis situations will not be needed anymore. Governments will be able to assign money for very particular purposes. Rent, energy, food. It's a revival of the tried and tested "food stamps" albeit with one very essential difference: you cannot build black markets with this kind of food stamps. 5 euros assigned to you for buying meat. Of cause you can buy the meat and then trade/barter that - but that's a different story.

I reckon you're left with questions - a lot of questions.

Who will create the money? Anyone could issue money (and probably should) and they would add their own name to the top of the ledger - for anyone later receiving the money to see whom to turn to in order to exchange the money for some other value asset. Most will, however, probably be created by national banks.

How will money be exchanged? Attaching a physical ledger to every cent obviously will not fly! Money will (go on) being exchanged electronically using digital wallets. Consumers are so used to it by now that anything else will certainly not meet with a happy ending.

Will we still use VISA, Mastercard, more? Well, that's a tricky question! The basic service is providing the buyer with an easy way of paying while avoiding to carry around cash money, and at the same time afford the seller an easy way to accept payment without getting their teller stuffed with cash money (both parties are happy to being less prone to thieves). This basic service is easy replicated by a single computer handling millions of transactions easy minute.

That's not what makes VISA bag 30B US and change in 2023. They operate as money lenders too – and that business will stay; but the 'card business' will change!

Who will profit from this 'stinking money'? Well, people who did come by their wealth in dubious ways (stealing, drugs, trafficking, more) probably will not, as well as banks, debit card services, (cash) money lenders, and a whole industry of scammers. Once consumers get used to pay with "stinking money" you will always be able to follow the money trail. Buying a second hand sofa will not require you to ask for the original receipt - just ask to see the ledger!

Will it be the end of the "snake oil business"? Probably not, but websites selling 10 dollar gadgets that they source in China at 50 cents will likely be in for some hardship!

Is that not going to disrupt trade altogether? In some ways, sure! Businesses that provide value will always prevail! If you package a product or service with added value through customer service, on-site support, installation, more – customers will favour your business; if your pricing is right! In fact trade will flourish because sellers and buyers will be able to do transactions cheaper and faster, and safer!

What are the downsides? Let me be honest: there are a few!

  1. unemployment: Tax officers, bank clerks, ATM repair men, commercial lawyers setting up trade contracts
  2. governments watching you: to many if not most having the government keeping too close a tab on your activities is less preferable
  3. something new: the biggest downside (apart from denying, those accustomed to enjoying the power of being in control of other peoples money, that luxury) probably will be a mental/psychological one; new ideas and new ways of doing things usually takes a very long time to get a foothold

Is this at all possible? Read about Ripples In The Fabric and a few previous posts on this blog, about the subject and then decide for your self.