Notes and coins are a record of a perpetual government debt owing to whoever has possession of the note or coin at a point in time. Those notes and coins are a form of bearer security (see bearer shares) because they are capable of being transferred between people at will without the government's consent being sought or required. It is thought that this is one reason why governments are now keen to replace notes and coin with digital currency.
Notes and coins represent debt because they are issued by a government accompanied by the specific assurance that they are a promise to pay, which promise is actually printed on UK bank notes. The government's promise to pay is fulfilled by its willingness to accept notes and coins in settlement of tax liabilities owing. As with all government created money, taxation is implicit in the process of government money creation, and its destruction.
Notes and coins are as a consequence as much representations of debt as are any other forms of money and they have no tangible worth in themselves.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
