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Free Banking Era in USA, as an Important Stage of Evolution of Private Money Institute

Free Banking Era in USA, as an Important Stage of Evolution of Private Money Institute

Journal of Economic Regulation, , Vol. 10 (no. 2),

The main question considered in the framework of the research concerns the features of the evolution of the private money institution at certain stages of historical time. Today, an extremely relevant topic for discussion in the economic and academic environment is the cryptocurrency market, the rapid growth of capitalization of which, in mid-2017, gave rise to a large number of disputes and assumptions regarding their future use, including as a basis for the implementation the private money theories in the real economy, first considered from a theoretical point of view by one of the creators of the alternative monetary theory of “subjective money” Edwin Riegel, and the representative of the Austrian School of Economics F. Hayek in his book "Private Money". The resonance of this phenomenon was due to the fact that before this, in the monetary history of mankind, as noted by Hayek himself, there were no full-fledged examples of private money, and only with the appearance of the first Bitcoin cryptocurrency in 2009. Nevertheless, in the economic history of mankind there was a period that can be characterized as one of the closest in its characteristics and instruments used, to the system of private monetary circulation and emissions - a free banking era in the USA in the 19th century. Thus, a more detailed study of the construction of a quasi-private financial and monetary system of that time will provide the key to understanding how in the future it is necessary to build the institutional environment of private money based on the use of cryptocurrencies, and its implementation in the real sector of the world economy.

Keywords: private money; institutional economics; free banking era; cryptocurrency; quasi-private money; transaction costs

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Founder: Ltd. "Humanitarian perspectives"
Online ISSN: 2412-6047
ISSN: 2078-5429