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Monetary Reform Light: Joseph Huber

February 4, 2018


Joseph Huber, chair of economic and environmental sociology at Martin Luther University of Halle-Wittenberg, Germany. writes:

“If a full ‘big bang’ transition from bankmoney to sovereign money cannot be achieved in the immediate future, something less radical might be attainable, some kind of monetary reform light”.


Sovereign digital currency coexisting with bankmoney 

Since around 2013/14 a number of scholars have been calling for ‘digital cash’, that is, the use of electronic or digital central-bank money in public circulation, not solely in interbank circulation as is the case today.

Over time, the high-powered central-bank money – either as sovereign currency on account or sovereign cryptocurrency – might take over the now predominant role of bankmoney on bank giro accounts.[1]

If a full ‘big bang’ transition from bankmoney to sovereign money cannot be achieved in the immediate future, something less radical might be attainable, some kind of monetary reform light.

Such reasoning is also encouraged by a growing number of central banks, who are now looking into the matter by conducting research and even enacting pilot projects.

The common feature of the various approaches put forth is the introduction of non-cash central-bank money into general public use, but without directly challenging the present bankmoney privilege, that is, the banking sector’s ability to create the very bankmoney on which the banks operate in their dealings with the non-bank public.

The idea relates to giving the non-bank public the option to choose between bankmoney and central-bank money, with the two coexisting side by side.

Some supporters idealise the approach as ‘combining the best of both worlds’[2], while others hope for the approach to be a half-way house towards full monetary reform, gradually reversing the wrong-headed development of the last hundred years through which bankmoney has driven out central-bank money by about 90–97 per cent.

As a result of that development we have a bankmoney regime today, pro-actively led by the banks’ primary credit and deposit creation (= bankmoney creation), while central banks have given up control over the stock of money, deliberately accommodating the banks’ residual demand for solid cash and reserves (= electronic central-bank money in a bank’s central-bank account).

Rather than being in control of the money, central banks have become anytime refinancers of the banks, no longer caring about the stock of money and restricting themselves to short-term base rate policy which is supposed to influence consumer price inflation.

Before discussing what electronic or digital central-bank money exactly is, and whether it is predominantly about sovereign cryptocurrency  or sovereign currency on account, a number of developments which make monetary reform measures rather urgent are outlined in the following section.

It should be noted that two other approaches often mentioned in the present context are helicopter money (also known as Quantitative Easing for people), and safe deposits by way of a voluntary 100% reserve on individual deposits. However, helicopter money and 100% reserve-backed deposits do not actually belong here, as will be discussed in two brief appendices at the end of the paper.

Read on here:


[1] Wortmann 2017a+b, Dyson/Hodgson 2016, Yamaguchi/Yamaguchi 2016, Huber 2017 188–190, Huber 2014 #ecash.

Wortmann, Edgar. 2017a. The virtual euro, Ons Geld Working Paper, Utrecht, https://

  • Wortmann, Edgar. 2017b. Deleveraging without a crunch, Ons Geld Working Paper, Utrecht, pdf.
  • Dyson/Hodgson 2016,
  • Dyson, Ben/Hodgson, Graham. 2016. Digital Cash. Why Central Banks should start Issuing Electronic Money, London: Positive Money.
  • Yamaguchi/Yamaguchi 2016,
  • Yamaguchi, Kaoru/Yamaguchi, Yokei. 2016. Peer-to-Peer Public Money System, Japan Futures Research Center, Working Paper No. 02-2016, Nov 2016.
  • Huber 2017 188–190,
  • Huber 2014 #ecash.
  • Huber, Joseph. 2014. Monetary reform as incremental innovation, http://www.sovereign­, #ecash and #offbalance.
  • Huber, Joseph. 2017. Sovereign Money, London: Palgrave Macmillan.

[2] Striner 2015 47.

Striner, Richard. 2015. How America can spend its way back to greatness. A guide to monetary reform, Santa Barbara, CA: Praeger.





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