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Private Currency
0A private currency is a currency issued by a private institution. It is often contrasted with fiat currency issued by governments.
money jar

In many countries, the issue of private paper currencies is severely restricted by law. However, in Scotland and Northern Ireland private sector banks are licensed by the government to print their own paper money.

Today there are several privately issued digital currencies in circulation, such as digital gold currency, that function as money. Transactions in these currencies represent an annual turnover value in billions of US dollars.

History
In the United States, the Free Banking Era lasted between 1837 and 1866, during which almost anyone could issue their own paper money. States, municipalities, private banks, railroad and construction companies, stores, restaurants, churches and individuals printed an estimated 8,000 different monies by 1860. If the issuer went bankrupt, closed, left town, or otherwise went out of business the note would be worthless. Such organizations earned the nickname of "wildcat banks" for a reputation of unreliability and that they were often situated in far-off, unpopulated locales that were said to be more apt to wildcats than people. On the other hand, according to Lawrence H. White's article in [1] "it turns out that “wildcat” banking is largely a myth. Although stories about crooked banking practices are entertaining—and for that reason have been repeated endlessly by textbooks—modern economic historians have found that there were in fact very few banks that fit any reasonable definition of wildcat bank." The National Bank Act of 1863 ended the "wildcat bank" period.

In Australia, the Bank Notes Tax Act of 1910 basically shut down the circulation of private currencies by imposing a prohibitive tax on the practice. Many other nations have similar such policies that eliminate private sector competition.

One example of a currency that lost government support but retained use amongst a community is the Swiss Franc.
money


Maintain a good payment record - It is very important to pay your bills on time. A lot of late payments can lower a credit history record.
 

 

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