A Local Currency?

[Bob Orts]

quote:

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Originally posted by EightFingers

but what happens if each island develops its own currency?

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Each island would be keeping more of their money until someone comes along and opens a broker office on the islands. They could sell for face value but buy at a discount. They will broker the sale of large sums into cash and possible even buy blocks from large establishments at a discount and exchange it for discounted cash. Over time, they can control the value of the currency on a local scale by valuing the cash equivalent.

Of course unless you have a lock on the area shopping and exchange such as in a Big Island currency versus a District currency, competition could devalue the currency. Imagine Puna Bucks and Kona Bucks and Hilo Bucks all competing. You may find an establishment in Puna unwilling to accept Puna Bucks because of limited use or less expenditure per customer, but will accept Hilo and Kona Bucks because they tend to spend more and it's worth their effort.