Monopoly on currency

from Wikipedia, the free encyclopedia

A currency monopoly is the legal monopoly on the issue of a currency . With a monopoly a legal tender is created.

Today, in democratic countries with a market economy, the issuer of this currency is usually a central bank to which the state has transferred this right. In doing so, they are usually granted the right to independently regulate the amount of money in the legal tender in accordance with legal requirements. Regardless of the design and minting of coins and banknotes, there is a legal order .

development

Currency monopolies in the sense of the exclusive connection between sovereignty, territory and currency are a relatively new phenomenon. Most of the history of money has been shaped by numerous rival currencies. It only began to change with the establishment of state sovereignty. In the 19th century, the UK became a real currency monopoly through the Banking Charter Act 1844.

The most important right of the Reichsbank , founded in 1875, was a banknote sovereignty that was sufficient to oust the majority of private central banks. There was still no talk of a monopoly, as the private central banks of the states of Bavaria, Saxony, Württemberg and Baden could remain in existence to a limited extent until 1935.

The current currency constitution is the result of a development process that began with the establishment of the German Empire in 1871 and the creation of a currency unit based on the gold mark in 1875 . Declared legal tender at the beginning of the 20th century, the Rentenmark was introduced in 1923 after hyperinflation . In 1924 the existing currency constitution was completely reformed and the Reichsmark was introduced. After the banking crisis in 1931, a banking supervisory authority was installed. During the Third Reich , the constitution was changed again to finance government spending. The independence of the Reichsbank was abolished, banking supervision intensified and the forced exchange economy tightened.

Since the Second World War one could speak of a customary recognition of state law. After the end of the war there was again a new currency constitution with the Deutsche Mark as currency and legal tender. The foreign exchange management continued to apply until the Foreign Trade Act 1961, as did banking supervision until the Banking Act 1961. The German monetary constitution remained essentially unchanged between 1948 and the introduction of the euro . The mark was legal tender, other bodies than the Bank deutscher Länder and Bundesbank were prohibited from issuing currencies.

The monetary constitution of Germany found its way into the European Union with the Maastricht Treaty . For the EU member states of the euro zone , the euro is the legal tender without EU law clarifying this term. The European Central Bank has the exclusive right to authorize the issuance of banknotes and coins .

The right to mint coins lies with the individual member states of the EMU, but is subject to a quantitative restriction by the ECB. Therefore, all euro notes are the same, but the coins are minted with different symbols depending on the country.

criticism

The free banking approach calls for regulatory equality for all banks and companies; the logical consequence would be the elimination of the currency monopoly. Even among the laissez-faire supporters, however, only a minority is in favor of realizing free banking.

Voting in Switzerland

A constitutional referendum on the banknote monopoly was held in Switzerland on October 18, 1891. The referendum to amend the constitution was passed and the federal government was given the sole right to issue banknotes.

Individual evidence

  1. ↑ a b Bardo Faßbender, Christiane Wendehorst, Erika Wet, Anne Peters, Ralf Michaels, Christian Tietje, Hanno Merkt, Friedl Weiss, Jan Hein, Daniel Thürer: Paradigms in International Law: Implications of the World Financial Crisis for International Law , CF Müller Verlag , ISBN 978-3-8114-5404-0 , p. 246.
  2. ^ Wilhelm Treue : Economic and technical history of Prussia , Verlag Walter de Gruyter , ISBN 978-3-11-009598-2 , p. 599.
  3. ↑ Christoph Herrmann: Monetary sovereignty, currency constitution and subjective rights , Mohr Siebeck , ISBN 978-3-16-150008-4 , p. 387.
  4. ^ Christoph Herrmann: Monetary sovereignty, monetary constitution and subjective rights , Mohr Siebeck , ISBN 978-3-16-150008-4 , p. 388.
  5. ↑ On the currency constitution based on the draft constitution for the European Union , Deutsche Bundesbank from November 2003.
  6. ↑ Christoph Herrmann: Monetary sovereignty, currency constitution and subjective rights , Mohr Siebeck , ISBN 978-3-16-150008-4 , p. 391.
  7. ↑ Vera Smith: The Rationale of Central Banking and the Free Banking Alternative , Minneapolis [1936] 1990, LibertyFund, p. 169.
  8. ^ Melvin W. Reder: Economics: The Culture of a Controversial Science , The University of Chicago Press, 1999, ISBN 0-226-70609-5 , p. 253.
  9. ^ Vote in Switzerland on the banknote monopoly
  10. ↑ Stefan Bode: The banking system in Switzerland , p. 9.