[67427] in Cypherpunks
Re: the theory of split currency
daemon@ATHENA.MIT.EDU (Rabid Wombat)
Sat Oct 5 23:01:30 1996
Date: Sat, 5 Oct 1996 21:30:59 -0400 (EDT)
From: Rabid Wombat <wombat@mcfeely.bsfs.org>
To: "James A. Donald" <jamesd@echeque.com>
Cc: AustrianEcon@agoric.com, cypherpunks@toad.com
In-Reply-To: <199609302118.OAA11208@dns2.noc.best.net>
On Mon, 30 Sep 1996, James A. Donald wrote:
> Fred Foldvary <ffoldvar@jfku.jfku.edu> wrote:
> > Is there a name for a dual or split currency, in which
> > there is one currency for domestic use and another, different
> > appearing, currency for foreign usage?
> >
> > Does anyone know of any country which has had such a
> > split currency?
>
> Many third world nations employed this system, one currency
> for internal use only, and one currency for international
> transactions. The international currency was sometimes
> denominated in hard currency, and reasonably convertible into it.
>
<some snipped>
>
> I speculate that this is because people find that they *must*
> obtain foreign currency, the internal currency being
> unspendable, and any method available to them for obtaining foreign
> currency is a criminal offense.
>
This is just another method of a fixed exchange rate system, with the
inevitable resulting black market for foreign currency.
Just my US$0.02 :)
-r.w.
