Demurrage currency

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Demurrage currency, also known as depreciating money or stamp scrip in its paper money form, is a type of money that is designed to gradually lose purchasing power at a constant rate. Demurrage money is often confused with inflation, as they both cause money to lose value, but they have significantly different economic effects. Unlike normal money, demurrage is designed to be only a temporary store of value. Demurrage money functions primarily as a medium of exchange and a unit of account. Proponents of demurrage currency generally believe that the medium of exchange and store of value functions of traditional money are antagonistic against each other. The German-Argentine economist Silvio Gesell advocated for demurrage currency as part of the Freiwirtschaft economic system. He referred to demurrage as Freigeld ("free money")—"free" because it would be freed from hoarding and interest. Gesell theorized that Freigeld would increase the velocity of money, eliminate inflation, reduce unemployment...

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