Synthetic Commodity Money

29 Pages Posted: 6 Feb 2012 Last revised: 21 Apr 2013

See all articles by George Selgin

George Selgin

The Cato Institute; University of Georgia

Date Written: April 10, 2013


This paper considers reform possibilities posed by a type of base money that has heretofore been overlooked in the literature on monetary economics. I call this sort of money "synthetic" commodity money because it shares features with both commodity money and fiat money, as these are usually defined, without fitting the conventional definition of either; examples of such money are Bitcoin and the "Swiss dinars" that served as the currency of northern Iraq for over a decade. I argue that the attributes of synthetic commodity money are such as might supply the basis for a monetary regime that does not require oversight by any monetary authority, yet is capable of providing for all such changes in the money stock as may be needed to achieve a high degree of macroeconomic stability.

Keywords: commodity money, fiat money, Bitcoin, Swiss dinar

JEL Classification: E02, E42, E52

Suggested Citation

Selgin, George, Synthetic Commodity Money (April 10, 2013). Available at SSRN: or

George Selgin (Contact Author)

The Cato Institute ( email )

1000 Massachusetts Ave. NW
Washington, DC 20001
United States


University of Georgia ( email )

Athens, GA 30602-6254
United States
706-542-2734 (Phone)
706-542-3376 (Fax)

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