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{{short description|Form of currency}}A private currency is a currency issued by a private entity, be it an individual, a commercial business, a nonprofit or decentralized common enterprise. It is often contrasted with fiat currency issued by governments or central banks. In many countries, the issuance of private paper currencies and/or the minting of metal coins intended to be used as currency may even be a criminal act such as in the United States (18 U.S. Code § 486).WEB, 18 U.S. Code § 486 - Uttering coins of gold, silver or other metal,www.law.cornell.edu/uscode/text/18/486, 7 July 2018, en, Digital cryptocurrency is sometimes treated as an asset instead of a currency. Cryptocurrency is illegal as a currency in a few countries (mainly in West Asia and North Africa).Today, there are over four thousand privately issued currencies in more than 35 countries. These include commercial trade exchanges that use barter credits as units of exchange, private gold and silver exchanges, local paper money, computerized systems of credits and debits, and digital currencies in circulation, such as digital gold currency.

Private bank notes

File:Delaware Bridge Company Dollar.jpg|thumb|right|A private $1 note, issued by the “Delaware Bridge Company” of New JerseyNew JerseyIn the United States, the (History of banking in the United States#1837%E2%80%931863:_%22Free_Banking%22_Era|Free Banking Era) lasted between 1837 and 1866, when almost anyone could issue paper money. States, municipalities, private banks, railroad and construction companies, stores, restaurants, churches and individuals printed an estimated 8,000 different types of money by 1860. If an issuer went bankrupt, closed, left town, or otherwise went out of business, the note would be worthless. Such organizations earned the nickname of “wildcat banks” for a reputation of unreliability; they were often situated in remote, unpopulated locales said to be inhabited more by wildcats than by people. The National Bank Act of 1863 ended the “wildcat bank” period. See also: History of free banking.(File:The City Bank Of Sydney 20 pound note.jpg|thumb|right|Private currency issued in Australia by The City Bank of Sydney circa 1900)In Australia, private currency had first been used since the arrival of European settlers in 1788, and into the early years of Federation before the Bank Notes Tax Act 1910 effectively shut down the circulation of private currencies by imposing a 10% tax on the practice, making it economically prohibitive. This Act was subsequently repealed by the Commonwealth Bank Act 1945, which imposed a £1000 per day fine for private currencies, and s. 44(1) of the Australian Reserve Bank Act 1959 LEGISLATION AU, Cth, act, rba1959130, Reserve Bank Act 1959, 44, Other persons not to issue notes. prohibited the practice outright. In 1976, Wickrema Weerasooria published an article which suggested that the issuing of bank cheques violated this section, to which banks responded that since bank cheques were printed with the words “not negotiable” on them, the cheques were not intended for circulation, and thus did not violate the statute.WEB, Weerasooria, Wickrema, The Australian Bank Cheque - Some Legal Aspects,www.austlii.edu.au/au/journals/MonashULawRw/1976/3.pdf, (1976) 2(2) Monash University Law Review 180. {{issn|0311-3140}}In Hong Kong, although the government issues currency, bank-issued private currency is the dominant medium of exchange. Most automated teller machines dispense private Hong Kong bank notes.International Bank Note Society. “Hong Kong’s 1,000 (HSBC) dollar note”.In Scotland, the Bank of Scotland, Clydesdale Bank, and the Royal Bank of Scotland, and in Northern Ireland, the Bank of Ireland, Danske Bank, First Trust Bank, and Ulster Bank, are authorised by Parliament to issue Pound sterling bank notes. They are subject to central bank (the Bank of England) regulations concerning “ring-fenced backing assets” and are backed in part by deposits at the Bank of England. They are exchangeable with other pound notes on a one-to-one basis, and circulate freely within the United Kingdom, though not legal tender, not even in Scotland and Northern Ireland. In fact, technically, no banknote (including Bank of England notes) qualifies as legal tender in Scotland or Northern Ireland.WEB,www.acbi.org.uk/media/sni_notes_factsheet_nov12_copy1.pdf, The Association of Commercial Banknote Issuers, Scottish and Northern Ireland Banknotes Fact Sheet, 2017-02-12,www.acbi.org.uk/media/sni_notes_factsheet_nov12_copy1.pdf," title="web.archive.org/web/20180128040158www.acbi.org.uk/media/sni_notes_factsheet_nov12_copy1.pdf,">web.archive.org/web/20180128040158www.acbi.org.uk/media/sni_notes_factsheet_nov12_copy1.pdf, 2018-01-28, dead,

Complementary currencies

England has had the Totnes pound since it was launched by Transition Towns Totnes Economics and Livelihoods Group in March 2007; A Totnes Pound is equal to one pound sterling and is backed by sterling held in a bank account. As at September 2008, about 70 businesses in Totnes were accepting the Totnes Pound. Other local currencies launched since then include the Lewes Pound (2008), the Brixton Pound (2009),NEWS, The Guardian, Will the Brixton pound buy a brighter future?,www.theguardian.com/environment/2009/sep/16/will-brixton-pound-work, Leo Hickman, 16 September 2009, 25 September 2012, the Stroud Pound (2009)Town launches its own bank notes BBC News 13 September 2009 and the Bristol Pound, which also allows for electronic payments.NEWS, Harvey, Dave, Bristol Pound launched to keep trade in the city,www.bbc.co.uk/news/uk-england-bristol-19627592, 21 September 2012, BBC West News, 19 September 2012, Austria had the Wörgl Experiment from July 1932 to September 1933.NEWS, Currency Solutions for a Wiser World » The Wörgl Experiment: Austria (1932-1933),www.lietaer.com/2010/03/the-worgl-experiment/, 28 September 2022, Lietaer, 17 January 2021, Bavaria, Germany, has had the Chiemgauer since 2003. As of 2011 there were over 550,000 in circulation.Since starting in 2006, the “City Initiative Karlsruhe” has issued the Karlsruher which has no nominal value. Every coin has the value of 50 Eurocents and is primarily used in parking garages.As of 2009, 120 companies in Karlsruhe accept the Karlsruher and usually grant a discount when paid with it.WEB, Karlsruhe (bonus system),ka.stadtwiki.net/Karlsruher_%28Bonussystem%29, 15 April 2014, de, Breadcoin was created in Washington DC in 2016 to address food insecurity and has a value of $2.20 when used at over 60 participating food vendors.NEWS, Iati, Marisa, 2019-01-11, ‘Breadcoin’ is a new currency in D.C. for people in need,www.washingtonpost.com/lifestyle/2019/01/11/breadcoin-is-new-currency-dc-people-need/, Washington Post, Washington DC, 2021-10-18, In Canada, numerous complementary currencies are in use, such as the Calgary Dollar and Toronto dollar. However private currencies in Canada cannot be referred to as being legal tender and many private currencies (as well as loyalty programs) avoid the word “dollar”, using names like “coupons” or “bucks”, to avoid confusion. Examples include: Canadian Tire money and Pioneer Energy’s Bonus Bucks.JOURNAL, Last, Arthur M., December 2003, Canadian Tire Money: An Analogy for Use When Discussing Weak Acid–Strong Base Titrations,pubs.acs.org/doi/abs/10.1021/ed080p1403, Journal of Chemical Education, 80, 12, 1403, 10.1021/ed080p1403, 2003JChEd..80.1403L, 0021-9584, Convertible Minute is a community currency launched by the Minutes Bank users, started in Romania.Customer reward and loyalty programs operated by businesses are sometimes counted as private currencies. However, though “points” or “miles” may be exchangeable for merchandise or travel from the program sponsor, most of them lack the key element for currency of being a medium of exchange transferable to other individuals and usable as payment for items from other vendors. A few programs do have “partnerships” allowing this to some extent, and permit the transfer of points or miles. Some startups, such as the Canadian website Points.com,WEB,points.com, Points.com, points.com, have sought to make loyalty “points” more currency-like by creating an exchange where points from one loyalty program can be traded for points in other such programs.WEB,www.pcmag.com/article2/0,2817,2369584,00.asp, Points.com establishes currency exchange for loyalty programs, PCMag, September 23, 2010,

Cryptocurrencies and digital currencies

A cryptocurrency is a form of digital or virtual currency where cryptography secures the transactions and controls the creation of additional units of the currency.NEWS,www.forbes.com/forbes/2011/0509/technology-psilocybin-bitcoins-gavin-andresen-crypto-currency.html, Crypto Currency, Andy Greenberg, Forbes.com, 20 April 2011, 8 August 2014, Technically, cryptocurrency is a not currency, but a digital form of token coins or scrip, as cryptocurrencies do not comply with the four fundamental functions of money according to economic theory. A cryptocurrency wallet can be used to store the public and private keys which can be used to receive or spend the cryptocurrency. The cryptographic systems used allow for decentralisation; a decentralised cryptocurrency is fiat money but one without a central banking system. In terms of total market value, Bitcoin is the largest cryptocurrency.NEWS, Espinoza, Javier, Is It Time to Invest in Bitcoin? Cryptocurrencies Are Highly Volatile, but Some Say They Are Worth It, 22 September 2014,online.wsj.com/articles/how-to-decipher-cryptocurrencies-1411333011, Journal Reports, The Wall Street Journal, 28 June 2016, On 6 August 2013, Federal Judge Amos Mazzant of the Eastern District of Texas of the Fifth Circuit ruled that bitcoins are “a currency or a form of money” (specifically securities as defined by Federal Securities Laws), and as such were subject to the court’s jurisdiction.WEB, Farivar, Cyrus,arstechnica.com/tech-policy/2013/08/federal-judge-bitcoin-a-currency-can-be-regulated-under-american-law/, Federal judge: Bitcoin, “a currency,” can be regulated under American law, Ars Technica, 2013-08-07, 2013-08-15, WEB, Securities and Exchange Commission v. Shavers et al, 4:13-cv-00416 (E.D.Tex.),www.docketalarm.com/cases/Texas_Eastern_District_Court/4--13-cv-00416/Securities_and_Exchange_Commission_v._Shavers_et_al/, Docket Alarm, Inc., 14 August 2013, In August 2013, the German Finance Ministry characterized Bitcoin as a unit of account, usable in multilateral clearing circles and subject to capital gains tax if held less than one year.NEWS,www.faz.net/aktuell/finanzen/devisen-rohstoffe/digitale-waehrung-deutschland-erkennt-bitcoins-als-privates-geld-an-12535059.html, Deutschland erkennt Bitcoins als privates Geld an (Germany recognizes Bitcoin as private money), Nestler, Franz, 16 August 2013, Frankfurter Allgemeine Zeitung, WEB,blogs.marketwatch.com/thetell/2013/08/19/bitcoins-are-private-money-in-germany/, Bitcoins are private money in Germany, Vaishampayan, Saumya, 19 August 2013, Marketwatch,blogs.marketwatch.com/thetell/2013/08/19/bitcoins-are-private-money-in-germany/," title="web.archive.org/web/20130824204723blogs.marketwatch.com/thetell/2013/08/19/bitcoins-are-private-money-in-germany/,">web.archive.org/web/20130824204723blogs.marketwatch.com/thetell/2013/08/19/bitcoins-are-private-money-in-germany/, 24 August 2013, dead, In Thailand, lack of existing law leads many to believe Bitcoin is banned.WEB, Watts, Jake Maxwell, Thailand’s Bitcoin ban is not quite what it seems,qz.com/110164/thailands-infamous-bitcoin-crackdown-is-not-quite-what-it-seems/, Quartz, July 30, 2013, 15 April 2014,

Private currency crimes

As national currencies can be counterfeited, so too can private currencies, and private currencies are subject to other criminal issues, including fraud.The Liberty Dollar was a commodity-backed private currency created by Bernard von NotHaus and issued between 1998 and 2009. In 2011, von NotHaus was arrested and subsequently convicted on charges of money laundering, mail fraud, wire fraud, counterfeiting, and conspiracy.PRESS RELEASE, Defendant Convicted of Minting His Own Currency, United States Attorney, U.S. Attorney’s Office, March 18, 2011, United States District Court for the Western District of North Carolina,www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency, December 5, 2012,www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency," title="web.archive.org/web/20121205094219www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency,">web.archive.org/web/20121205094219www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency, dead, WEB, Tom, Lovett, Local Liberty Dollar ‘Architect’ Bernard von NotHaus convicted, March 19, 2011, Evansville Courier & Press,www.courierpress.com/news/2011/mar/19/local-liberty-dollar-architect-found-guilty/, The charges stemmed from the government view that the Liberty silver coins too closely resembled official coinage.In 2007, Angel Cruz, founder of The United Cities Corporation (TUC), announced he was establishing an alternative “asset based” currency named “United States Private Dollars”.“Florida man launches ‘United States Private Dollar’”, Daily Kos, August 25, 2007. Cruz claimed United States Private Dollars were “backed by the total net worth of the assets of its members” and had printed six billion dollars’ worth of the private currency;www.theunitedcities.org/web/content/view/15/14/" title="web.archive.org/web/20080112204706www.theunitedcities.org/web/content/view/15/14/">“TUC Currencies”, United Cities website, via Internet Archive the backing assets were claimed to be valued at 357 billion dollars.“TUC Improving the US Economy by the Circulation of Their Private Currency Today”, OpenPR.com August 2, 2007 The currency featured the slogan “In Jehovah We Trust”.“Kissimmee nonprofit ‘concerned’ over checks”, Orlando Sentinel, August 25, 2007 The Comptroller of the Currency issued an alert warning banks that checks issued by TUC were “valueless instruments” and should not be cashed. In 2008, Cruz was indicted by a Federal grand jury in Florida on one count of conspiracy to defraud the United States under {{usc|18|1344}} and {{usc|18|371}} and six counts of bank fraud under {{usc|18|1344}} and {{usc|18|2}} in connection with his dealings with Bank of America, while attempting to get United Cities bank drafts cashed.Indictment, United States v. Cruz, case no. 6:08-cr-00177-UA-DAB, docket entry 1, Aug. 6, 2008, U.S. District Court for the Middle District of Florida (Orlando Div.). As of late October 2010, Cruz was still a fugitive,Status Report, United States v. Cruz, case no. 6:08-cr-00177-UA-DAB, docket entry 88, Oct. 28, 2010, U.S. District Court for the Middle District of Florida (Orlando Div.) though an associate was convicted on related charges and sentenced to prison for eight years. Angel Cruz was finally captured in 2020.WEB, U.S. Marshals Arrest Fugitive 9 Years on the Run in the Dominican Republic,www.usmarshals.gov/news/chron/2020/091420a.htm, www.usmarshals.gov, 7 January 2021,

See also

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• Commodity money
• Complementary currency
• Disney dollar
• Gold standard
• History of the United States dollar
• Kirtland Safety Society
• Local Exchange Trading Systems
• Monero
• Nano
• Nxt
• Peercoin
• Prison commissary
• Scrip
• Store of value
• Ven (currency)
• Dash

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References

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Further reading

• Hayek, Friedrich A. Denationalization of Money: An Analysis of the Theory and Practice of Concurrent Currencies 1977. {{ISBN|978-0-255-36087-6}}