Global reset – Monetary decoupling (Part 9: Information perspectives on digital currencies)
Phuah Eng Chye (9 October 2021)
Early versions of the future of money visualised electronic rather than digital applications of currencies in a largely physical world. Perhaps, it could be said that the concept of digital currencies was formalised in “the early 1980s when David Chaum first proposed a digital currency based on blind signatures in 1983”. James Pang divides the development of digital currencies into three phases. “The first phase from 1983 to 2007 can be called the exploratory phase or the pre-Bitcoin (BTC) era. In this phase, the key technologies – cryptography, security technology, electronic payment system, and so on – underlying digital currencies were gradually being perfected” but were held back by “technology limitations and the business environment”.
“The emergence of BTC, built on top of blockchain and cryptography technologies, in 2008 that digital currencies began to have a huge impact on the world”. “The second phase between 2008 and 2017 can be called the practice phase or the BTC era…many other cryptocurrencies such as ETH and XRP, also created with blockchain and cryptography technologies, grew rapidly. At the same time, various related technical and business innovations rapidly developed and gave rise to smart contracts and the initial coin offering (ICO)”.
The third phase from 2018 can be called the booming phase” or the post-BTC era. James Pang notes “in this phase, the cryptocurrency market continues to develop rapidly and important digital currency innovations – e.g., security token offering (STO), decentralised finance (DeFi), non-fungible token (NFT), and so on – are also quickly emerging…Stable coins (such as Tether) are increasingly important in the cryptocurrency ecology as well. Various central banks around the world are also expanding their research into central bank digital currencies (CBDCs)”.
The digitalisation of currencies is only playing catch-up with the rest of the economy, much of which had undergone digitalisation earlier. The digitalisation of currencies will facilitate tighter integration of financial processes with other digital processes in production, logistics, distribution and sales. Nonetheless, digital currencies are not just as an efficient substitute for physical and electronic money but is a game-changing paradigm. Digitalisation imbues currency with the characteristics of information and transforms currencies from being a medium of payment into becoming information artefacts. As information artefacts, digital currencies can take on multi-dimensional roles prescribed by the different information perspectives.
The basic information elements are intangibility, transparency, speed and size. In combination, they give rise to various information effects. Abundance prompts us to revisit the basis for traditional monetary theory which is based on scarcity. For example, the quantity theory of money posits excess money creation relative to the supply of goods will cause price inflation. At the extreme, this leads to hyper-inflation and currency becomes worthless like banana money. However, this perspective is biased by the severe historical limits on places to park excess money. Then, choices were limited to hard currency, bank deposits and physical assets such as gold; and restricted money to circulating within a largely physical world.
In an informationalised economy where money and output are largely digitalised, money behaves differently because it operates under conditions of abundance. Capital markets can easily manufacture financial assets to match the expansion in liquidity and specific needs of users. This caps the impact of “excess” liquidity on inflation and interest rates because the “excess” liquidity does not result in excess demand for physical assets but instead flows into financial assets. Instead of consumer price inflation, asset price inflation occurs as money crowds into the most popular assets. Consumer price inflation can occur but they are likely to be cost-push driven, triggered by supply shortages or hoarding (investing).
The information effects hypothesis predicts a pattern of currency concentration-fragmentation. This is largely due to network effects which results in the concentration of intermediation functions. Hence, the payment networks (Swift), platforms (Alipay and WeChat Pay) and global banking tend to be dominated by a handful of players. Long taileffects cause the fragmentation of products and venues. This was evident during the e-phase; reflected by the proliferation of currency-related products and venues (such as store credits, game tokens and airline miles) and is further demonstrated by mushrooming of crypto currencies, assets and market venues. However, concentration-fragmentation patterns are fluid. For example, the weaponization of the US-centric international payments network resulted in a loss of anonymity, access and liquidity; increased costs and risks; and the network is likely to experience entropy or decay. In the meantime, the dominant intermediation role of large global banks is now being shared by central banks and large asset managers following prudential regulations that curbed the former’s expansion and QE which expanded the latter group’s balance sheets.
Another prominent information effect is convergence. Digitalisation increases the overlap between money and information and converts currency into an application to control personal data and behaviour. In effect, digitalisation facilitates aggregation of data from different information silos such as personal details (identity, biometrics), preferences (searches, transactions), circumstances (financial and non-financial) and movements (location). There are significant economic and governance consequences in relation to the collection, control and ownership of this treasure trove of personal data.
Money is memory
In 1998, Narayana Kocherlakota postulated the hypothesis that money is memory. Agustín Carstens explains “by substituting for an otherwise complex web of bilateral IOUs, money is a substitute for a publicly available and freely accessible device that records who owes what to whom”. “The idea that money is the economy’s memory leads us to two forks in the road for…decisions about architecture and access”. First, to ensure “the memory is always and everywhere correct”, this requires ensuring the integrity and safety of the payment system, as well as the finality of payments. The choice of operational architecture is between a central authority (central banks) and a decentralised governance system such as Bitcoin. Bitcoin has drawbacks. “In practice, it is clear that Bitcoin is more of a speculative asset than money…as Bitcoin approaches its maximum supply of 21 million coins, the seigniorage to miners will decline. As a result, wait times will increase and the system will be increasingly vulnerable to the majority attacks that are already plaguing smaller cryptocurrencies”. Second, “the notion of money as the memory of society’s economic interactions” implies economic relationships are built on “the identification of all counterparties, as well as some degree of traceability of the underlying transactions…The idea of complete anonymity is hence a chimera. Users have to leave a trace and share information today with financial intermediaries. This makes it easier for them to work online and prevent losses”. This emphasises the importance of rules and safeguards “to establish both proper identification and privacy in the payment system”.
Money as credit
Nik Milanovic argues “society is beginning to wake up to a tremendous shift in one of the most fundamental underpinnings to how we live our lives: the credit system…In the beginning, credit was highly personal and subjective – this persisted for thousands of years”. He suggests during the First Age: credit as trust, “these conditions artificially constrained debt, meaning that, for most of human history, economies didn’t grow much, their size being capped by a lack of credit. The Second Age: credit as algorithm was launched in 1956 with the introduction of FICO (an acronym for the company Fair, Isaac and Co named after its founders) scoring. Statistical modelling enabled the implementation of risk-based pricing and “credit became for the first time objective” rather than subjective. The Third Age: credit as liberation “witnessed a Cambrian explosion in credit innovation, unveiling hundreds of possibilities for the future of credit. Unlike the last two ages, credit of the future will be personal, predictive, self-correcting and universal”.
Nik Milanovic explains “one of the most revolutionary aspects of the future of credit is that it will increasingly come to look like cash (and cash, conversely, like credit). Consumers won’t have to request credit; rather it will be automatically allocated to them in advance based off many factors, such as behavior, age, assets and needs. It will be liquid, rather than dispersed in fixed tranches. And as it becomes increasingly commoditized, in many cases it will be close to free”. He visualises automation of payment modes and consolidation of credit lines into a “guaranteed credit plan available to them, all linked into one master identity or profile” and the phasing out of physical instruments (cash and cards). “Prices will become infinitesimally divisible, optimized in some cases for fractional cent values. Denominations and different currencies will become background features”. “In the future, people will be paid in real time…Payday loans as an industry will evaporate…It’s easy to see this applied to consumers: get real-time credit based on your regular pay and expenses”.
Nik Milanovic predicts “in the next phase, credit will revolve around the individual. Right now, we live in a world of gatekeepers: Centralized data aggregators, such as credit bureaus, act as intermediaries to credit. This advantage will increasingly be eroded by individually permissioned data (a concept known as self-sovereign identity). This is consistent with trends in cross-border work and globalization: In an atomized world, the individual is the core unit and will need to take her information with her, without reliance on third parties. It could reduce some $15 billion in annual fees paid to access data and make information more secure, eliminating single points of failure…One-size fits all scores like FICO will become disaggregated. Credit is a relational system: Our credit indicates our standing relative to a wide network. But people shouldn’t be represented by averages. Credit will become more multivariate, using machine learning and breaking apart the contributing factors and weights that make up FICO…Credit will become contextual. Your maximum available credit will fluctuate based on ever-changing factors such as payroll and bills. It also will be specific to purchases: You will receive different levels and costs of credit based on the value and type of the asset you’re buying. For instance, credit to buy a crib for your newborn may be cheaper than credit to buy a trip to Vegas. Illiquid assets will be automatically usable to secure credit…(The founders of Kora point out that the problem is not that the poor don’t have wealth, it’s that their capital is locked up)…Credit will be psychographic and predictive. It won’t be enough to look backwards at your past behavior – your creditworthiness will change dynamically as you move around, make purchases and stay active. It will be dynamically assigned to specific needs (like ink if you buy a printer) before you realize you have them”.
He explains blockchains will have three early uses, namely to reduce verification latency to make it cheaper to disperse credit; to aggregate data into universal profiles to make it much easier for credit providers to underwrite borrowers; and to facilitate self-enforcing smart contracts that will automatically collecting debt payments or adjusting financing terms due to changing credit conditions. “Credit will not rely on active investment managers to lend or borrow: Any capital not currently tied into a contract will be programmed to continuously search for the highest risk-adjusted return – including provision of credit”.
Money as purpose
Money as purpose refers to a system of incentives or restraints built around a digital currency or token to reinforce certain behaviors. Nik Milanovic notes “futurists like Daniel Jeffries envision currencies with built-in features to incentivize different behaviors – like saving versus spending – and universal basic income tokens, to decentralize financial inclusion. Platforms like Bloom, which now has 100 applications being built on it, are reimagining credit at the protocol level. These systems are tackling first-principles questions, such as can the future be entirely meritocratic, or can people inherently create trust with no data”.
Paul Glavin points out “public goods are severely underfunded because we’re dependent on government spending and donations to finance them, and from a strict financial returns perspective, these are terrible investments…A public good whose value was stored, on the other hand, would allow investors to put capital down that contributed to the creation of that good, and then later sell their investment for market value, maybe even for a profit. Imagine how much more likely you’d be to invest in your city’s parks, schools, or libraries if you could expect that your investment would both hold its value and contribute to the public good”. Towards this end, he proposes exploring innovative ideas such as tokenized public goods – “a financial asset where private organizations compete to issue digital tokens that simultaneously incentivize public good creation and function as stores of value”. “This concept of public good tokenization has emerged in recent years thanks to cryptocurrencies…In fact, several digital tokens exist now that could be considered Tokenized Public Goods (though not very effective ones) to reward sustainable acts” such as riding a bike to work (ECO Coin), solar energy production (SolarCoin), incentivizing “positive actions” like volunteering or donating food (UNICEF recently launched Boost Token).
Valuing digital currencies
As currency move through different forms – physical, electronic and digital – they can be differentiated by their information bundles and network connectivity. Physical currencies rank the lowest on these attributes. Digital currencies offer the most extensive information bundles and the best connectivity. Extensive datasets are critical to facilitating new use applications (smart contracts) and conveniences (algorithms). The Bank of International Settlements (BIS) notes strong network effects will give digital currencies a competitive edge. “The more users flock to a particular platform, the more attractive it is for a new user to join that same network, leading to a data-network-activities” or DNA loop”. However, this leads an unfractionalised expansion in regulatory scope as well. The BIS notes “on the one hand, the DNA loop can create a virtuous circle, driving greater financial inclusion, better services and lower costs. On the other, it impels the market for payments towards further concentration”. Overall, the value of public and private digital currencies will be determined by its information bundle and network connectivity.
The value of CBDCs should closely approximate, but not necessarily equate to, the value of the physical or electronic form of the sovereign currency. The value of sovereign currencies is associated with information on the issuer (governments) – such as policies, economic performance financial and geopolitical standing. Legal tender currencies enjoy the advantage of being backstopped by laws and liquidity guarantees (lender of last resort).
This is in contrast with cryptocurrencies. Views on the value of cryptocurrencies – given thousands of cryptocurrencies exist – vary substantially. Ba Shusong, Zhang Daichao and Zhu Yuanqian thinks “encrypted digital currency has the characteristics of decentralization and anonymity. There is no national sovereign credit endorsement, the intrinsic value is zero, and the fluctuation range is large. Their value comes only from the public’s belief that they can be exchanged for other goods, services or a certain amount of sovereign currency across time, that is, value consensus. The value consensus mainly comes from two aspects: First, the speed and cost of encrypted digital currency mining. The supply method of digital currency is to form rewards through blocks, which require energy and time consumption. A reasonable block reward mechanism can ensure a stable supply of encrypted digital currencies. Second, the dark web and cryptocurrency are naturally compatible in terms of encryption and concealment. Dark web transactions often use cryptocurrency as a means of payment, and there is a demand for cryptocurrency. Once people lose their consensus on value, the trading system constructed by encrypted digital currencies will instantly collapse, which is similar to a bank run”.
This view perceives private digital currencies as memes and their values mainly driven by the enthusiasm of their adherents. But this explanation isn’t fully satisfactory. The debate over whether cryptocurrencies are a tulip-like speculative bubble, or represent a payment or investment revolution may miss the point. The critical aspects of cryptocurrency revolve around its usage rather than its value or price volatility.
We can start by comparing the features of cryptocurrencies with CBDCs. CBDCs have extensive information bundles and legal standing. Cryptocurrencies have limited information bundles and are oriented towards protecting privacy and providing anonymity. Accordingly, transparency is poor and price discovery is lacking for cryptocurrencies.
In addition, cryptocurrencies such as bitcoin are also not designed to cater to retail payments. Ba Shusong, Zhang Daichao and Zhu Yuanqian point out “private encrypted digital currency adopts a decentralized peer-to-peer transaction model and does not rely on financial intermediaries, which can reduce transaction costs and improve efficiency”. However, verification is dependent on “consensus mechanisms such as Proof of Work (POW) or Proof of Equity (POS)” which requires a large amount of computing power. High throughput volumes, low values and the requirement to process chargebacks (for retail payments) can overload the verification process, lengthen processing time and cause transaction costs to be relatively high. Cryptocurrencies are not competitive against CBDCs in retail payments.
But cryptocurrencies are suitable for wholesale and high-value transactions; particularly in the informal economy. In this context, cryptocurrency intermediaries have an incentive to maintain high prices as large denominations increase cost-effectiveness. Higher cryptocurrency valuations will lower transaction costs on a percentage basis for wholesale transactions. Since its information bundles are small, the usage, and therefore value, of cryptocurrencies is highly dependent on its network features and intermediation ecosystem. This includes features such as scale, supply, illegality, access, conveniences, speed, liquidity and anonymity; and on the cost structures for transactions, production, safe-keeping, and for managing price volatility.
Based on its usage features, cryptocurrencies function similarly to derivatives in that they possess no inherent value and their price could fall to zero. This suggests that cryptocurrency prices are a derivative on the future value (exchange rate, interest rate) and supply of the USD. This implies that cryptocurrencies can be valued similar to options based on the unfractionalised price of the underlying asset, volatility, time to expiration and interest rates. Cryptocurrencies provide a cost-efficient and leveraged means of calibrating portfolio strategies to manage USD liquidity and volatility. Similar to derivatives, the liquidity and volatility of cryptocurrencies could eventually overtake that of the underlying (USD).
There are attempts to replicate sovereign currencies with cryptocurrency products such as stablecoins so users can benefit from the “instant transaction, programmable, open and anonymous features of distributed ledgers”. However, Ba Shusong, Zhang Daichao and Zhu Yuanqian points out “because the issuer of stablecoins is an unofficial institution and is not restricted by national boundaries, without the restrictions of a unified global regulatory framework, it fails to have credibility to ensure the safety of reserve assets, fails to clarify the transparency of reserve asset management, and fails to clarify its issuance”.
Central banks are concerned by the policy implications of digital currencies. An IMF report on “The rise of public and private digital money” highlighted digital money could “alter an economy’s structure, business cycle, and exposure to currency substitutability” and “affect the instruments, frameworks, conduct, and coordination of monetary, fiscal and exchange rate policies and the availability of policy space”. In particular, digital money could also have an impact “on net and gross capital flows, market integration, the cross-border transmission of shocks, the risk of balance of payment problems, cross-currency arbitrage, and countries’ choice of foreign exchange regime” and “alter the effectiveness of capital account management measures”. This could affect “the configuration of reserve currencies” and “the global financial safety net, including backstops, regional arrangements”.
In this context, current monetary theory may be irrelevant because it is largely framed within the paradigm of traditional bank intermediation. The bank credit model is an anachronism in a global landscape dominated by central bank sterilisation, markets and asset managers. We should not think of currency within the context of monetary theory but within the context of information theory and financialisation.
Generally, digitalisation converges money and information. This transforms currency into a data application for monetisation and accelerates the financialisation of an economy. In this context, financialisation should be viewed as an information process for the organisation of capital. In this context, the evolution of the regulatory, market and settlement infrastructure to facilitate digitalisation will strengthen price and liquidity linkages between all financial products. This will boost public acceptance of both sovereign and private digital currencies which will compete and complement each other.
The consequence for monetary policy is to deal with the tight linkages between monetary policy, and liquidity flows and asset prices. Hence, QE creates excess USD liquidity which can feed into the prices of digital currencies and assets. Rising US interest rates and contracting USD supply pose the biggest danger to cryptocurrency valuations. A fall-out in cryptocurrency assets can have contagion effects if the risks are not well managed.
Inevitably, central banks need to deal with the fact that digital currencies will disrupt the intermediation landscape. It will undermine the viability of traditional intermediaries which the central banks rely on as their main vehicles for policy implementation. Hence, central banks need to conceptualise how the intermediation system should be re-configured to serve the needs of individuals and businesses; and the rules and tools it needs to manage risks to its policy objectives. Within an information paradigm, monetary policy should not focus on consumer price inflation because of abundance. Instead, policy should focus on managing the appropriate levels of liquidity in relation to asset prices and balance sheet soundness. Regulators should also review whether markets are doing a good job at managing, pricing and allocating capital and risks and whether the information and the process underpinning transactions are efficient and trustworthy.
The battle for control of information
The significance of digital currencies is that it changes information flows – about individuals, firms and organisations, about their transactions, income and wealth. In the past, perhaps banks had the most extensive financial datasets – which is unsurprising as the banking industry is the oldest information industry. But, over time, governments have increased their control over these datasets through expanding regulatory oversight. Now it is tech platforms that are accumulating massive datasets which they use to make inroads into a wide range of businesses, including finance. When the datasets are combined with a digital currency, it perhaps elevates platforms such as Facebook to become more powerful not only banks but possibly even governments.
Digital currencies thus represent a form of competition between governments and the private sector (banks and platforms) to control information. This tussle raises critical questions. First, who should get access to and control the extensive and timely datasets which can be used for analysis, predictions and to trigger actions. Is it better if the information advantage resides with governments or with private firms? After all, governments and private firms have demonstrated that have inclinations to use data to suppress citizens, or in the case of the latter employees and customers.
Second, why should private firms or individual programmers be granted the right to earn seigniorage from the issuance of private digital currencies or be allowed to compete with government currencies? In any case, governments are likely to shape the rules to favour their needs and will likely impose legal constraints on private collection and use of information.
Third, countries are likely to assert sovereignty rights to maintain gate-keeping control over cross-border payment data (on counterparties, transactions and assets). In particular, digital currencies are likely to disrupt USD supremacy due to the cost-efficiencies of peer-to peer networks and issues in relation to oversight and anonymity. Geopolitical bickering over the rules for data and technical standards has already started. Divergent technical standards, information-sharing arrangements and regulations will give rise to the emergence of zones offering different levels of anonymity, opacity and connectivity. There will be a need to align the international rules for digital currencies with the regulations on data governance.
Cryptocurrencies, and now CBDCs as well, are part of a broad revolution triggered by information disruption which will affect how economic and social activities are organised. Digitalisation is not a matter of choice; it is already the present and definitely the future. Digitalisation is pervasive in all information-related goods and services – such as content (text, sound, pictures) and logistics (production, warehousing, transport, retailing), and administration (ID systems, welfare, billing). Currency digitalisation is perhaps the last piece of the puzzle to establish the operating base of the information society. Digital integration of finance with other processes will set the foundation to add new information layers such as devices (IOT) and algorithms. It is inevitable that many legacy intermediation processes will become obsolete in due course.
We are only at the beginning of the journey for digital currencies. The error is to visualise digital currencies as an efficient replication of legacy currencies. CBDCs will have minimal impact if the information bundle is minimised. The game-changing power of digital currencies can only be unlocked if it is used to connect different information silos. This means information between income, spending, borrowing, investing, and other government and private databases can be linked. There are immense benefits but the risks are also substantial. In particular, good design of CBDCs is necessary to ensure that the potential of digital currencies is tapped and that society does not end up being led into a surveillance dystopia.
Agustín Carstens (27 January 2021) “Digital currencies and the future of the monetary system”. Speech at Hoover Institution policy seminar. Bank for International Settlements (BIS). https://www.bis.org/speeches/sp210127.pdf
Ba Shusong, Zhang Daichao, Zhu Yuanqian (22 December 2020) “The development status and trend of global digital currency”. https://bashusong.blog.caixin.com/archives/239505
Bank of International Settlement (BIS) (23 June 2021) “Annual economic report 2021: Chapter III. CBDCs: An opportunity for the monetary system”. https://www.bis.org/publ/arpdf/ar2021e3.htm
Herve Tourpe, Yan Liu, Dong He, Tommaso Mancini-Griffoli, Erica Sandoval, Koshy Mathai, Piotr Nowak, Samir Suleymanov, Giovanni Dell’Ariccia, Sole Martinez Peria, Erika Tsounta, Martin Čihák, Kenneth Kang (29 July 2021) “The rise of public and private digital money”. International Monetary Fund (IMF). https://www.imf.org/en/Publications/Policy-Papers/Issues/2021/07/28/The-Rise-of-Public-and-Private-Digital-Money-462919
James Pang (21 Jun 2021) “China’s central bank digital currency (CBDC) innovations”. ThinkChina. https://www.thinkchina.sg/chinas-central-bank-digital-currency-cbdc-innovations
Nik Milanovic (17 March 2018) “The third age of credit”. Techcrunch.
Paul Glavin (21 November 2019) “Tokenized public goods – A new store of value”. Medium. https://medium.com/@tpgwhitepaper/tokenized-public-goods-a-new-store-of-value-83b91c53d436
Paul Kratoska (2009) “Banana money: Malaya’s wartime currency”. End of Empire.
OECD (2002) “The future of money”. https://www.oecd.org/futures/35391062.pdf
Phuah Eng Chye (2015) Policy paradigms for the anorexic and financialised economy: Managing the transition to an information society. http://www.amazon.com/dp/B01AWRAKJG
Phuah Eng Chye (15 August 2020) “Economics of data (Part 3: Relationship between data and value and the monetisation framework)”. http://economicsofinformationsociety.com/economics-of-data-part-3-relationship-between-data-and-value-and-the-monetisation-framework/
Phuah Eng Chye (14 September 2019) “Information and development: Escaping the industrial maturity trap and moving forward to an information society”. http://economicsofinformationsociety.com/information-and-development-escaping-the-industrial-maturity-trap-and-moving-forward-to-an-information-society/
Phuah Eng Chye (11 April 2020) “Anonymity, opacity and zones”. http://economicsofinformationsociety.com/anonymity-opacity-and-zones/
Phuah Eng Chye (7 November 2020) “Information rules (Part 1: Law, code and changing rules of the game)”. http://economicsofinformationsociety.com/information-rules-part-1-law-code-and-changing-rules-of-the-game/
Phuah Eng Chye (5 June 2021) “Global reset – Two whales in a pond”. http://economicsofinformationsociety.com/global-reset-two-whales-in-a-pond/
Phuah Eng Chye (19 June 2021) “Global reset – Monetary decoupling (Part 1: Sterilisation and QE)”. http://economicsofinformationsociety.com/global-reset-monetary-decoupling-part-1-sterilisation-and-qe/
Phuah Eng Chye (3 July 2021) “Global reset – Monetary decoupling (Part 2: Economics of large central bank balance sheets)”. http://economicsofinformationsociety.com/global-reset-monetary-decoupling-part-2-economics-of-large-central-bank-balance-sheets/
Phuah Eng Chye (17 July 2021) “Global reset – Monetary decoupling (Part 3: Consequences of diverging policies)”. http://economicsofinformationsociety.com/global-reset-monetary-decoupling-part-3-consequences-of-diverging-policies/
Phuah Eng Chye (31 July 2021) “Global reset – Monetary decoupling (Part 4: Lessons from Plaza Accord)”. http://economicsofinformationsociety.com/global-reset-monetary-decoupling-part-4-lessons-from-plaza-accord/
Phuah Eng Chye (14 August 2021) “Global reset – Monetary decoupling (Part 5: The end of USD supremacy – Will it be different this time?)” http://economicsofinformationsociety.com/global-reset-monetary-decoupling-part-5-the-end-of-usd-supremacy-will-it-be-different-this-time/
Phuah Eng Chye (28 August 2021) “Global reset – Monetary decoupling (Part 6: The forthcoming currency war)”. http://economicsofinformationsociety.com/global-reset-monetary-decoupling-part-6-the-forthcoming-currency-war/
Phuah Eng Chye (11 September 2021) “Global reset – Monetary decoupling (Part 7: Currency wargame scenarios)”. http://economicsofinformationsociety.com/global-reset-monetary-decoupling-part-7-currency-wargame-scenarios/
Phuah Eng Chye (25 September 2021) “Global reset – Monetary decoupling (Part 8: Sovereign digital currencies and networks in the currency war)”. http://economicsofinformationsociety.com/global-reset-monetary-decoupling-part-8-sovereign-digital-currencies-and-networks-in-the-currency-war/
 See OECD (2002) “The future of money”.
 See Policy paradigms for the anorexic and financialised economy: Managing the transition to an information society.
 Paul Kratoska relates “after Japanese forces occupied Malaya early in 1942, they introduced new currency notes. Because the $10 note carried a picture of a banana plant, the wartime currency was referred to as banana money. For the first two years of the occupation, the Japanese maintained monetary discipline and kept circulation of this currency under control. However, with the country’s trading economy at a standstill, there was little to tax and, in order to fund the civil administration and purchase supplies for the military, the Japanese began printing more and more money. In December 1940, the active circulation of currency in Malaya was 120 million dollars. By the middle of 1945, the Japanese may have printed 4,000 million dollars, and the active circulation was 30 times greater than before the war. The predictable result was hyperinflation”.
 “Information rules (Part 1: Law, code and changing rules of the game)”.
 It is possible in the future there may be variations between the value of different forms of currency; particularly if physical cash and e-money is being phased out and digital money becomes mandatory. In these instances, there may be surcharges for physical cash while there may be benefits attached to CBDCs.
 See “Economics of data (Part 3: Relationship between data and value and the monetisation framework)”.
 See Policy paradigms for the anorexic and financialised economy: Managing the transition to an information society; “Information and development: Escaping the industrial maturity trap and moving forward to an information society”.
 At the moment, cryptocurrency products generally do not offer interest coupons and therefore the adjustment will be largely in the price.
 See “Anonymity, opacity and zones”.