Money is a technology coupled with a community

Written by Professor Michael Mainelli, chair of Z/Yen & President of London Chamber of Commerce & Industry - late Lord Mayor of London 2023-2024

Edgy - some cross border CBDC musings

Central Bank Digital Currency (CBDC) are getting edgy. Not in a “buy a leather jacket and join a punk band” way, but in a “this might demolish our economy and we haven’t worked out the kinks” kind of way.

Let’s start simple: my definition of money is “a technology communities use to trade debts across space and time.” That is, it’s a community’s agreed way to freeze favours into tokens. These tokens - cowrie shells, fei stones, gold coins or crypto - only work if the community believes in them. Small communities own things in common and use direct mutual obligations - “Brother John, you missed church again” - while larger ones invent money to swap chickens for shoes. British economist William Jevons captured money’s ideal functions: “medium, measure, standard, store.” In its 16-year lifetime, Bitcoin has been a tiny medium of exchange, a wildly fluctuating unit of measure or standard and an exploding store of value, so far.

Let there be

Fiat money is …