Odd Lots How Do We Define a Currency?
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May 31, 2025 
Stefan Ingves, former head of the Sveriges Riksbank, Rebecca Spang, a history professor at Indiana University, and economist Iñaki Aldasoro delve into the elusive definition of currency. They discuss the evolution from physical forms to digital money, highlighting how technology reshapes monetary systems. Trust becomes a key theme as they explore currency's role during financial crises and the impact of design on national identity. They also consider the implications of public versus private currencies, offering a rich perspective on what truly underpins value in our economies.
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Money as Social Convention
- Money is a social convention tied to trust and abstraction.
- It evolves from tangible objects like seashells to intangible forms like digital ledgers.
Hierarchy of Money
- Money is a hierarchy of promises to pay with varying levels of 'moneyness'.
- Central bank money is ultimate money, while private money depends on trust and validation.
Core Functions of Money
- The traditional functions of money are unit of account, means of payment, and store of value.
- Store of value is often the most fragile but vital function for maintaining trust.