Summary of Competition in Currency

The Potential for Private Money

Cato Institute,

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Competition in Currency summary
Economies, banks and consumers could profit from privately issued money.


6 Overall

5 Applicability

8 Innovation

7 Style


Economist Thomas L. Hogan plows fertile if esoteric soil in examining privately issued banknotes. Drawing from detailed research, Hogan explains how the US’s pre-Civil War “free banking” system enabled pure currency competition and resulted in economic stability, limited inflation and substantial growth. In this report from the generally conservative Cato Institute, Hogan contends that a move away from central banking could benefit US banks and put an end to inflationary policies that have devalued the dollar. Although many argue that emerging technologies and payment systems are making cash obsolete, Hogan constructs an argument for private money and the establishment of a global “commodity-based currency.” getAbstract suggests this thought-provoking report on the unusual subject of the economic and profit-making potential of private money to investors, analysts, and banking and finance professionals.

In this summary, you will learn

  • How the “free banking” system in 19th-century America facilitated economic growth and limited inflation
  • Why privately issued banknotes would improve today’s monetary policy
  • How private money could mean billions in profits to US banks
  • Why a “commodity-based currency” would provide more global economic stability than existing currencies offer


Private Currencies
The US Federal Reserve holds the monopoly on providing currency for the United States. That was not always the case. Private banks used to issue their own notes. The limited inflation and greater economic stability that a decentralized currency provides could be an ...
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About the Author

Thomas L. Hogan, an assistant professor of finance at Troy University in Alabama, is a former research fellow at the Cato Institute and the American Institute for Economic Research, and a former consultant to the World Bank.

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