6. VARIOUS PROPOSED MONETARY SYSTEMS
Despite the fact that the transformed and expanded finance is managed virtually, the money used in there is simultaneously moving the real economy, so finance is becoming to abuse the whole economy. However, even if finance is managed virtually, as long as it is separated nearly 100% from real economy operations like the old Japanese stock market, even if the financial bubble collapses,it will be over a problem only between people participating in the bubble game and it will have little effect on the real economy. In this way, a monetary and financial system is now required that is close to the real economy and enables the real economy to be operated without being influenced by the ups and downs of speculative finance and enables to live in a plentiful and stable manner, and it seems that its feasibility will increase with progressing to information society.
Various monetary systems have been proposed in opposition to transformed and expanded money existed under the administrative currency system of the state and asking for avoidance of its instability. In the old days, Silvio Gesell proposed a currency system in which money have function only as a distribution medium and control interest rates by the money existed as lapsing money that laps after expiring a specified period of time after money issue by depreciation with expiring a certain period,however it did not come to realize again after the temporary coming to be realized by the revolutionary government in the German Revolution.
Also, F. A. Hayek has proposed that let the money issuance under non-state management against Keynes, multiple organizations freely design the money system (name, unit, operation method, etc.) and issue money, introduce free competition between moneys, and provide no barriers to regulate the free activities of the banking industry between countries, further introduce a floating exchange rate system between moneys, then the monetary value will be stabilized. But, it is difficult to be realized as a real money system because it cannot be accepted by the state and it does not have the opportunity to establish own foothold originally.
Also, various local currencies that are limited and effective within the region based on the mutual trust of local communities are proposed. Those are freely issued and utilized in much more extent under regionally limited, but after all, it can not be universalized cross the region and replace the current money system.
In addition, various virtual currencies using the Internet have been proposed as adapting to the information society, and some of them have got to have a certain extent globally like Bitcoin. Bitcoin is brought up by a person named "Nakamoto Satoshi", and that is a digital currency established using data compression by a "cryptographic hash function" and a digital signature by a "public key cryptosystem" on a P2P type distributed network. Its rules and applications are set and managed by "Bitcoin Community" which is a site on the Internet. It is just the money generated by the information society. Money(Bitcoin) is supplied by "mining" rather than managed by the state, the "mining" means replacing the mineral(gold) mining to virtual "mining" that is the task of first performing work based on the rule that is to be secure the reliability of money, and money(Bitcoin) is obtained by the miner of "mining" work,thus money(Bitcoin) is supplied in the money system.
The essence of Bitcoin is being "data registered money", that is, the circulation of Bitcoin as money is registered as traceable data. The reliability of the Bitcoin system is ensured by the means of that the data of Bitcoin circulation is traceably registered and it is constantly verified, whereby Bitcoin is approved as value media and acceptable as money. However, although Bitcoin is used for international remittance of the weak by being able to remit money inexpensively by using the net, the possibility of growing into a currency for global economic activity is low, because the main transaction of Bitcoin is speculation based on expectation of rising in price against existing currencies. The reason is that an upper limit is imposed on the amount of money supply and it becomes to have scarcity value if it circulates to some extent, as a result it becomes speculative by raising against the existing currency. So, Bitcoin system does not become to the money system stuck closely to the real economy.
7. PROPOSAL OF NEW MONETARY SYSTEM
7.1 What is the new money system (M money system)
In an ideal money system, in order to ensure the reliability of the system and to fully fulfill its function as a distribution medium, the amount of money supply is to be increased or decreased instantaneously or with high responsiveness corresponding to the value transaction volume. In other words, it is in the condition that the money can be supplied so that the amount of money corresponding to the increase or decrease of the value transaction volume gets on the distribution and the money necessary for the activities of the real economy is easily supplied. As an idea for that purpose, it can be considered a monetary system consisting of data registered money in which money is freely issued at the time of trading based on mutual trust with the partner and the money is issued plus normal money and minus counter money at the same time so as those absolute value corresponding with the transaction amount and the total always becomes zero. In a sense, it may be better to say that currency is not issued but generated based on mutual trust in transactions. Also, considering that money is a medium generated when value is distributed, it can be said that naturally it is zero in total.
Here, as a money unit, [Moun (abbreviated as M)] shortened Money Unit as a plus normal money and [c-Moun (abbreviated as cM)] shortened the counter Money Unit as a minus counter money are proposed, and the following will explain using this abbreviation. In the money issuing system using M and cM, specifically, a money issuing site is established on the Internet and a money issuing / clearing application is provided. Each economic entity accesses the money issuing site, downloads the application, and registers data identifying himself, thereby opening an account. The application is a system which has a accounting table and a balance sheet respectively for each account, and makes it possible for the trading partner to obtain the past history and the current height of the accounting table of the account and the balance sheet as necessary.
By constructing these system that the counter money cM is issued at the time of issue of the normal money M with registering and disclosing transaction data, differing to present money that is issued and managed by the central bank based on the reliability of the state, anyone can issue money if it meets the conditions, and credibility of the money is ensured by mutual trust among trading entities and its chain.
In the actual trading process, in principle, at the time that each economic entity obtains goods, receives services and pays for consideration, the entity issues money with a price corresponding to the value by generating a pair of monies M and cM at the same time,and paying M with holding cM,and that fact is recorded in the accounting table of his account. And, if one own sufficient M in the accounting table before the transaction, it is offset immediately and M of the balance is recorded in the accounting table, the trading partner can confirm the state immediately. This is based on the fact that confirmation is indispensable,because there is possibility that the paid M will be revoked if the balance of the accounting table of the trading partner is in the state of holding cM with offsetting the cM after payment or it is already in that state before the transaction. In that case, check the balance sheet to check whether the trading partner is able to withstand holding of cM, whether it is a reliable partner, and it will decide whether to make the deal or to stop the transaction.
Also, when a producer who produces goods and services sell newly produced value in the market, the purchaser newly issue M and cM, and the producer holds the M and the purchaser holds the cM. The producer distributes M to the market as purchase consideration of goods and services for further production and M circulates in the market. The purchaser keeping cM is offset with M acquired from other trading partner in the market. Thus, in the the whole economy, amount of money that is increased in accordance with the expansion of the production will be circulated.
On the other hand, if the possession of M in the account is maintained even if cancel cM generated by the payment, immediate payment can be made from the account, so that the immediate payment system using the card can be applied and used conveniently. Therefore, in order to maintain the state of holding M in the account and having capability for immediate payment by the card, it is conceivable that appropriate institution may be asked to transfer M to the account and accept cM held by payment of M. At this point a financial institution specializing in that, that is, a bank as a money issuing and lending institution will be established. In addition, even for a general business corporation, when cM remains in an account due to payment involved in transactions in the course of doing business, it is substantially functioning as a money issuing organization. In that case, however, it is verified by the trading partner whether or not they hold various assets that can hold reliability for holding such cM referring to the balance sheet.
7.2 Exchange in M money system
Next, the exchange of M with the currency of another system, for example the dollar which is the current currency, is similar to the purchase and sale of goods and services. When buying a dollar, get the dollar by issuing M and paying issued M and cM generated with the issuing M is offset by the holding M. On the contrary, when selling the dollar (when buying M), pay the dollar and get M, and the opponent who get the dollar and hold the generated cM offset by the holding M.
The exchange rate of M is decided and declared by for example the M issuing site based on the calculation using currency basket method in that exchange rate of M is calculated at some reference time and as the display currency using dollar which is the current key currency at sum up of the value of appropriately set units of major currencies such as dollar, euro, yen, and the like with evaluating weights according to the amount of trade by the each currency. After that, calculating and publishing it every fixed period (for example, 24 hours) and merely recommending a transaction at that rate, it is possible to maintain a stable value standard without any monetary policy. If it becomes one of the major currencies, the M monetary system establishes its own value standard and it is possible to keep stable value without being affected by fluctuations of other currencies even when shifting to the floating exchange rate system, since in the M money system money is issued in accordance with substantive activities of economy.
7.3 Security in M money system
Since the M money system is a system of data money using the Internet network, ensuring its security is an extremely important task, but it will be able to secure its security by further improving security measures in response to improvements of information communication technology just like sites on the Internet of various important institutions such as financial institutions today.
At that time, the M issuing site encrypts the basic information of the account and stores it in the data center and at the same time stores multiple copies at multiple data centers to secure the security. Security with respect to transaction data is secured by that a plurality of registered PCs of each account or a data storage medium attached thereto are selected for each transaction, encrypted transaction data is distributed and stored, and accompanying with access at the time of occurrence of the transaction necessary data is retrieved to the site. Further, the security of the system is secured by enforcement of continuous and automatical check whether there is no unauthorized access or modification to these data center or data storage medium. The cost required for the service of such M issuing site can be easily secured by imposing a very small fee for each transaction.
7.4 Finance in M money system
Banks are institutions that are de facto authorized to deposit M from many economic agents as deposits and possess a large amount of M so that they can by themselves freely issue and lend M, possessing cM corresponding to the amount of issuing M, and having the right to receive repayment of M with interest in return for taking over cM, that is, a claim. Thus, although banks are able to issue money freely while possessing cM, in order to secure their reliability and to avoid the risk of bankruptcy, there is naturally a limit to holding cM. For example, the condition of the limit is not more than K times the sum of self owned M corresponding to capital stock and deposited deposit M (ie, cM ≤ K (self owned M   deposit M)), and K is coefficient regulated by interest rate.
The characteristic of the bank under this M money system is that it is necessary to self-digest the holding cM which become bad debt thereby the debtor become unpayable, and it is different from as it is now in which after all it is simply not return a loan created unilaterally by credit creation even though the assets on the books are damaged by the disposal of bad loans. On the contrary, the side of the economic entity that borrowed M has a debt to pay back with interest, and at the same time in the event that the bank fails due to the occurrence of possibility that the bank can not respond to the payment request of the deposit M, the borrowed M immediately expires and disappears, and the entity retains the cM corresponding to the balance of borrowed M and if the entity does not procure M separately the entity will also fail. And if the entity fails the entity will be eliminated from the M money system and after that liquidation by M becomes impossible. On the bank side, the cM held by the loan disappears, and the bank is liquidated in that state and the balance of the deposit M is repaid proportionally.
As a result, this severity will guarantee the reliability of the money system, and it will block the way to generate financial bubbles with creating financial assets by securitizing receivables. That is, in relation to claims and obligation in the current monetary system, money itself is not established by mutual trust but is treated as an independent value carrier based on the reliability of the state, so even though after collecting or division of credit, rights to money continue to exist autonomously, accordingly it is possible to apply securitization by applying a large number of laws.On the other hand,in the M money system, because monetary claims and obligations are integrated with money phenomenon based on mutual trust and can not separate them, that is, because the obligee and obligor are connected mutually based on the fact that the obligee owes obligor liability for loan by the holding of cM via monetary relationship, and the obligor also takes responsibility in the form that borrowed M becoming void against the collapse of the obligee, so changing of the obligee is required permission of the obligor, it is impossible to securitize receivables, and the M money system can not generate financial bubbles.
As a financial institution under the M money system, in addition to the above banks, securities are inherently unnecessary, but insurance is important on their behalf. The fundamental economic activity type that conforms to the M money system is a non-profit corporate activity in the sense of non-profit distribution, and it is necessary that the non-profit enterprises become mainstream for the M money system becoming universal and eliminating the need for securities. With regard to the provision of funds, the main financial institutions will be banks that provide funds subject to the receipt of appropriate interests, angel investment institutions that boldly invest in venture businesses, and insurance that provides the business fund insurance to facilitate the distribution of funds.
Here, there is a opinion that there is a concern about obstructing the development of society by losing funds for venture in non-profit distribution, but it is a matter of groundless. For example, as an insurance to promote angel investment for venture, it is considered to be preferable to establish an angel investment insurance that pay insurance money to investment funds at the time of business failure and for its management fund receive a part of business profit as post-payment of insurance premium instead of dividend when the business is successful. Thus, business funds insurance fulfills its function on behalf of securities requiring speculative funds, and the insurance system can be realized by financing with deduction of insurance premiums or by post-payment. At that time, the information has a risk reduction effect, and insurance will be transformed so that business funds insurance can be handled by advanced information processing.
8. CONCLUSION
It is considered fair in recognition of the present situation that while strengthening regulations to curb the runaway of financiers that have been converted into cancers, oversupplying money by conducting monetary easing in different dimensions to secure the expansion and reproduction of financial capital in an effort. Although, it seems that, in order to succeed such subtle policies that follow these two rabbits, after all, because of contradictions arising there, it will be forced sacrifice to the socially vulnerable seeing globally.
This paper proposed M money system as a money and financial system that can solve such problems. This M money system was able to propose with feeling its feasibility because the bit coin which is the data registration money on the net was actually traded significantly and the system was running gained reliability globally. It clearly shows that socialization of information has progressed to such an extent that money that does not rely on state power is distributed globally, which is quite different from the money issued by the central bank based on the credibility of the state.
The time of the M money system starting to operate economically significantly is when the excessively expanded financial bubble collapses and a serious financial crisis has occurred and the existing monetary issued by central banks in major countries unstably repeat jump and crash and their credibility against money has been ruined. For M money system developing to full-scale replacing the existing currency that has lost its trust, it is necessary to actually be upright the M money system before that. That is, by keeping a state where M money issuing site is launched, an account is established by a considerable number of economic agents, and even if it is a little from the economic viewpoint economic transactions are carried out using M, it can actually show that stable transactions can be secured by the M money system without being influenced even in a state in which the circulation of existing money system is confused, so it is considered that the M money system will be accepted at a stroke. In the M money system, from the essence of the system itself it can be developed globally, rather it is original, but since the M money system is based on mutual trust among economic agents, it is thought that initially probably it will be launched by adopting it as local money based on regional connection and then the distribution range will gradually spread through business relationship especially with non-profit enterprises.