Why You Can’t Mint a Dime

By Lawrence E. Reed
The Freeman

Everybody knows what will happen if you set up a private mint in your basement, stamp out a few coins and call them “nickels” or “dimes.” You won’t circulate much longer than they will.

Most Americans today would recoil at the suggestion that coinage could or should be issued privately. They’re unaware that private coinage has a rich history in the United States.

Monopoly Money

The U.S. Constitution expressly forbids the states to print paper money. It grants the Congress the power to issue coinage. But nowhere does it prohibit private parties from creating either paper currency or metallic coin. For seven decades, Americans used gold and silver coins from both public and private mints and paper currency issued by private banks and companies.

Even today, private paper money is not illegal as long as you don’t break a few important rules: Don’t imitate the appearance of government notes (that’s counterfeiting) and don’t demand payment of dollar debts in anything but government dollars.

Check out the Wikipedia entry for “private currency” and you’ll find that today “there are over four-thousand privately issued currencies in more than 35 countries. These include commercial trade exchanges that use barter credits as units of exchange, private gold and silver exchanges, local paper money (such as “BerkShares”), computerized systems of credits and debits, and electronic currencies in circulation, such as digital gold currency.” A couple million BerkShares (denominated in dollars) have circulated in western Massachusetts since 2006. The BerkShares Web site lists more than 400 local businesses that accept them.

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