Money Function Research Articles

Features and Factors of the Implementation of the Function of World Money by Reserve Assets in the Modern GMFS

Features and Factors of the Implementation of the Function of World Money by Reserve Assets in the Modern GMFS

The Impact of the Issuance of e-CNY on the Business Strategy of Commercial Banks

This article comprehensively analyzes the issuance background, main features, technical architecture, and the impact on commercial banking operations and regulatory systems of China's Digital Currency Electronic Payment (DCEP or e-CNY). E-CNY is a legal digital currency that has the essential functions of money and a centralized two-tier operating system, making it compatible and stable with the current financial system. The article first outlines the main characteristics of e-CNY, reviews in detail the research and development process and pilot situations since 2014, and demonstrates its application progress in various scenarios. Furthermore, the article delves into the profound impact of e-CNY on commercial banks' deposits, loans, and international operations, suggesting that e-CNY may reduce the deposit base of commercial banks while providing Chinas small and medium-sized enterprises (SMEs) with a lower-cost financing channel, thereby promoting the development of the real economy. On the international front, promoting e-CNY is expected to enhance cross-border payments' efficiency and strengthen CNY's international competitiveness. Subsequent analysis of the practice of China Construction Bank (CCB) in the field of e-CNY showcases how commercial banks adapt to the era of digital currency. It also points out the need for further clarification and improvement of the regulatory framework to ensure the sustainable development of e-CNY. Finally, particular attention is given to the regulatory challenges e-CNY poses, especially regarding anonymity management, personal information protection, and delineating regulatory responsibilities.

ANALISA AKAD AS-SHARF DALAM TUKAR MENUKAR (DINAR DIRHAM) DALAM PEMIKIRAN SYAIKH TAQIYUDDIN AN-NABHANI

The purpose of this study is to find out the as-sharf contract in exchanging currency according to Islamic law, to find out the as-sharf contract according to Sheikh Taqiyuddin an-Nabhani and to find out how the reality occurs in the exchange of as-sharf contracts. This study is a qualitative study by reviewing various literatures that are relevant to the subject matter, and Gerai Dinar as the object of research to find out the real reality, using the literature review method, observation and by interview and further documentation using data analysis techniques using the deductive method. The results of the study indicate that as-sharf transactions are permitted on condition that they must be in cash or directly and must not be more than what is exchanged. If there is an excess, then that is called usury and the law is haram. On the other hand, the function of money is only as a means of exchange and a means of calculating units of goods. If someone makes a sale and purchase of currency, then the law is haram, because money cannot be used as a commodity.

Negentropy approach to justification of the essence of money

Тhe article discusses existing theories of money, their advantages and disadvantages. The commonalities and differences in existing theories of money are revealed. The author's classification of theories of money is given. The concept of negentropy is substantiated as the methodological basis of the negentropic approach to substantiating the essence of money. The objective negentropic nature of money as a commodity is revealed. The subjective nature of money based on trust is shown. The essence of money as a universal equivalent of the stock of negentropy is revealed. An explanation of the functions of money is given from the point of view of the negentropy approach. Inflation is considered as a manifestation of the entropy of money itself. The laws of monetary circulation are explained from the point of view of the negentropy approach. Existing theories of money are considered as special cases of negentropy theory. Recommendations are given for regulating money circulation, taking into account the negentropic nature of money.

John Stuart Mill on economic fluctuations and commercial crises

Many early 19th century economic thinkers have provided ideas to explain the causes of commercial crises, as against the Classical belief on the impossibility of a general disequilibrium between demand and supply. J.S. Mill contributed to this debate suggesting an analysis of money and credit as generators of economic fluctuations and crises. Mill apprehended the significance of the function of money as a store of value and explained cyclical fluctuations based on three interrelated causes: the role of money as credit, the propensity of moneylenders to overexpand their credit and the effect of the general tendency of profits to fall.

Theoretical and legal issues of defining digital currencies as an administrative and legal phenomenon

The last decade has seen a rapid growth of innovations in the field of IT technologies, one of the consequences of which was a change in the approach to the payment system – for the first time in human history, electronic records rather than real funds were provided in exchange for goods and services, which made it possible to represent money and currencies in a virtual form. The emergence of cryptocurrencies and the development of electronic payment systems have created the basis for the emergence of digital currencies, a technological innovation that performs the exchange functions of money, but operates outside the modern banking sector and has developed outside the supervision of monetary regulators. Since the first digital currency, bitcoin, was created, the digital currency market has been growing rapidly and has already become significant for the global economy. Currently, digital currencies are widely used in the economic and legal environment of Ukraine. Despite certain attempts by the national legislator to regulate relations in the field of digital currencies, a number of aspects remain unaddressed by the legislator, there is legal uncertainty regarding activities related to digital currencies, there is no regulation of the procedure for the activities of entities providing services in the field of digital currencies, and, most importantly, the terminology for defining the definition of digital currencies in the legal plane is not regulated at the doctrinal level. This is important in the context of the development of administrative law and the related phenomenon of "digital currency". The purpose of the paper is to study the theoretical and legal issues of defining digital currencies as an administrative and legal phenomenon. The paper examines the definition of the category «digital currency» – a digital object intended for payment functions contained in the form of a set of electronic data (digital code or designation) in an information network operating on the basis of distributed ledger technology, the circulation of which is regulated by administrative law. The analysis has shown that there are numerous approaches to understanding legal relations in the field of digital currency circulation. These relations are based on the principles of discretion and equality of the parties with a mandatory method of legal regulation. Therefore, administrative legal relations in the field of digital currencies are social relations regulated by administrative law regarding the possession, use and disposal of digital currencies in accordance with the rules of administrative law.

The Velocity of Money and Lessons for Monetary Policy in Nigeria: An Application of the Quantile ARDL Approach

AbstractThe paper investigates the determinants and stability of the income velocity of money while accounting for structural breaks in its approach from the period Q1 1981 to Q4 2023 in Nigeria. The paper extends previous works by accounting for four velocities of money functions having accounted for structural breaks in its approach. The study adopted the Bai and Perron breakpoint test, the Zivot and Andrews, and Perron and Vogelsang structural break unit root tests to determine the break dates and the variables’ stationary properties. In analyzing the main results, the study used the quantile ARDL method to establish the determinants of income velocity of money in Nigeria, while it used the CUSUM tests to establish the stability of money velocity in Nigeria. The study found that the determinants of the velocity of money are per capita income, the exchange rate, financial development, inflation, and the interest rate across the four models. Furthermore, the four velocities of money functions were unstable for Nigeria using the cumulative sum and cumulative sum of squares tests. Consequently, the study recommends effective monitoring and the provision of sound monetary policies to ensure a stable and predictable velocity of money. This can be achieved by understanding and focusing on these key determinants and crafting informed strategies to manage economic growth and stability. This holistic approach ensures that the benefits of economic policies are felt broadly across the economy, ultimately bolstering overall financial health and enhancing the velocity of money, which is crucial for sustained economic progress.

Abu Ubaid’s Perspectives And The Dynamics Of Digital Currency In Modern Islamic Economics

This research aims to discover how classical Muslim scholars named Abu Ubaid and contemporary academics think about the existence and Islamic law regarding digital currency. This library research uses meta-analysis, sentiment analysis, and critical analysis. This research uses secondary data from scientific journal articles published in 2017-2023. The data source in this research was obtained from the Dimension database. The research results show that there are 106 pieces of scientific literature about digital currency from an Islamic perspective and 35 scientific kinds of literature about Abu Ubaid in the economic field with fluctuating literature development. Digital currency is not based on Abu Ubaid's thinking about the function of money because digital currency is a virtual currency that does not have underlying assets and many elements of uncertainty and other harm. Contemporary research studies also indicate a prevailing inclination towards negative rather than positive sentiment regarding the presence and implementation of Islamic law in digital currency. The dar'u al-mafasid muqaddam ala jalb al-masalih principle might help resolve the dispute between those who permit and those who forbid it. This research can be used as reference material for relevant research in the future and is helpful as material for public reflection and evaluation for policymakers to revitalize the application of digital currency by Islamic principles.

The Relevance of Money Function to Digital Money (Cryptocurrency) On The Abu Ubaid Perspective in Kitab Al-Amwaal

Seiring perkembangan zaman yang berdampak pada perkembangan teknologi di mana dunia saat ini sudah mengenal apa yang disebut internet, sistem pembayaran pun menemukan arah baru. Ada yang menginginkan digitalisasi sistem pembayaran namun tetap menggunakan instrumen konvensional, maka muncullah uang elektronik. Namun ada juga yang menginginkan digitalisasi sistem pembayaran dengan menggunakan instrumen digital juga, maka muncullah uang digital atau dikenal dengan cryptocurrency. Uang Digital (cryptocurrency) masih menuai pro kontra pada kalangan ulama. Penelitian ini menggunakan metode kualitatif deskriptif dengan teknik studi kepustakaan. Hasil penelitian ini menurut Abu Ubaid pada Kitab Al-Amwal uang digital (cryptocurrency) tidak memiliki fungsi uang yang sesuai dalam Islam sehingga tidak dapat diakui sebagai alat transaksi pembayaran yang sah.

Evaluating the emergence of contactless digital payment technology for transportation

This study explores the adoption of contactless digital payment technology (Cowry card) for transportation in Nigeria, a developing country with inherent challenges in digitalisation. The research addresses the engagement of Nigerian consumers with this technology and provides insights that can be applied to other developing countries facing similar difficulties. The study adopts the Rogers innovation-decision model as a theoretical framework and employs a multi-staged qualitative methodology, including interviews, ethnographic fieldwork, and netnography. The challenges consumers face in adopting this innovative technology are examined, along with the adaptation of stakeholders and the social function of money in a cashless payment system. The research contributes to understanding contactless digital technologies, technology adoption, and digital transformation. It highlights the need for customised approaches to technology adoption, considering each country's unique infrastructural and economic challenges. The study emphasises the importance of considering hybrid systems involving digital technology and human interaction to support and reassure consumers.

Биткоин и формы денег: вопросы теории

The paper considers the question that has gained relevance in the last decade: whether the cryptocurrency bitcoin is money. The economic literature provides different opinions on this issue. The analysis shows that disagreements arise because of the different understanding of the category of ‘money’ rather than because of the nature of bitcoin. The author analyzes popular interpretations of money in terms of their applicability to the definition of the role and place of cryptocurrencies in the financial system. The purpose of this study is to define money as a financial instrument that linksthe creation of gross social product with its distribution. The author believes that money emerged and exists as a tool that ensures a connection between the contribution of each economic entity to the total product of society and the right to receive an equivalent amount of goods from this gross product. At the same time, the author defines money as an ‘ideal right’ to receive a share of the gross social product. In this regard, the analysis of bitcoin shows that this cryptocurrency allows obtaining goods from the gross social product in many countries, while bitcoin owners do not contribute to the gross social product. Based on this, bitcoin cannot be considered money; it is a money substitute, or surrogate money. At the same time, bitcoin was created as money and performs the functions of money, but to a limited extent. Bitcoin can only perform the functions of money as a supplement to an existing official currency. It is not capable of functioning as the only currency in a society. The interpretation proposed in this paper can be used for the purposes of developing the Russian law on cryptocurrencies is currently being worked on by the Government and the Central Bank of Russia.

Function follows Form or Form follows Function – The Legal Nature of CBDC

Abstract 211Central Bank Digital Currency (CBDC) is often described as the future of money, pictured to function as a new, widely adopted means of payment. Whilst economic and public law implications of CBDC issuance have received close scrutiny, private law issues – especially the question of CBDC’s legal nature – have received little attention. This is surprising, given that the function of money as a means of payment is primarily shaped by the private law framework. So far, this framework is tailored to money’s specific forms of appearance, either as (tangible) property or as (intangible) claims against financial intermediaries. Early research has sought to simply classify CBDC within this dichotomy, according to its design respectively being token or account based. Assuming a German private law point of view, this paper will put such classification to the test as regards the intended “European CBDC”, the digital euro. It will show that the focus on token versus account is misguided and ultimately unhelpful, as the digital euro would in neither form fit within the existing legal framework. Drawing on the discussions surrounding the legal nature of cryptocurrencies and cryptoassets, as well as the recent experience with the dematerialisation of securities, it will be argued that the envisioned dematerialisation of cash offers the opportunity to re-think the legal nature of such new money, based not on its form, but on its function as a circulating means of payment. Putting function before form allows technology-neutral answers to related issues, such as the legal assessment of CBDC transfer, ultimately equipping private law for the future of money.

The Function and Role of Money: Analysis in Islamic Economic Studies as a Unit of Value and as a Medium of Exchange

In Islamic economic studies, there are only 2 functions of money: money as a unit of value and money as a medium of exchange. There are four functions of money in the conventional economic system: money as a unit of calculation, money as a unit of exchange, but in conventional principles, money not only functions as a legal medium of exchange but also as goods that can be traded or to get profits, money as a unit of store of value, and money as a standard unit of payment in the future. This study aims to find out how the people of Bukittinggi perceive the function of money from an Islamic economic perspective. The type of research used is qualitative descriptive research. The research informant was the Muslim community of Bandar Lampung City. Collecting data is done through documentation, observation, and interviews. The data analysis techniques used are data reduction, data presentation, and conclusions. From the results of research conducted by researchers, it was found that most people's perceptions about the function of money are in line with Islamic economics, but a small number have perceptions that are not in line with Islamic economics because they think that money can be used as a tool to take personal advantage. This is contrary to the concept and function of money in Islam

Monetary Reform and Central Bank Digital Currencies: The Impact on Retail Banking

This research aims to clarify the impact of monetary reform on retail banking, with the introduction of private crypto-currencies (CCs) and retail central bank digital currencies (CBDCs). Given the exponential increase in private de-centralized CCs, involving stablecoins and non-backed digital assets, total crypto assets have now developed into a USD 1.04 trillion market capitalization. Governments and monetary authorities were initially reticent, but now a number of central banks are developing their own wholesale and retail CBDCs. By conducting library research, document and content analysis involving secondary data, this research confirms, involving central bank admission, that the current centralized monetary system allows commercial banks to lend the vast majority of deposit money into existence. However, the impact of private CCs and introduction of retail CBDCs will eliminate credit creation, thus rendering the commercial banking model obsolete. This will inevitably involve a structural change in the global financial system, with the separation of the public issuance of money and the private issuance of equity finance and investment. Ultimately, retail CBDCs will have to develop into public stablecoins that are pegged to intrinsic value to satisfy the store of value function of money and provide stability as the common denominator for all economic transactions.

Money in Islamic Economics Perspective

In the very simple stages of human civilization, the provision of the necessities of life was carried out by exchanging necessities (bartering). Money has a very strategic position in the world economic system, so it is not easy to replace it with other media. In Islamic economics, money is only seen as a medium of exchange, and not as a commodity. The role of money is intended to eliminate injustice, dishonesty, and exploitation in the barter economy. Initially, the function of money was namely as a medium of exchange. However, in its development, the main function began to shift. Economic system analysts view the function of money not only as a medium of exchange but also as a commodity so that money can be bought and sold like a commodity. In this research, the author formulates a problem as to what is the concept of money from an Islamic economic perspective and its function from an Islamic economic perspective. In this research, the author uses library research methods.
 Keywords: money, economy, Islam

Cryptocurrency: A Currency or Investment Asset?

As most countries use currencies to denote paper money created as a medium of exchange for buying and selling goods or services. Nevertheless, there are attempts from several entities to create a crypto asset named cryptocurrencies which aims to replace the functions of paper money. The issue arises whether cryptocurrency is valid to be used as a currency or investment asset according to Shariah’s perspective. This article aims to clarify the Shariah views on the legality of cryptocurrency, analyze the suitability of cryptocurrencies as a currency or investment assets, and finally, suggest that cryptocurrency is one of the investment assets or commodities in line with the requirements of Shariah. The research adopts pure legal research methodology utilizing content analysis on the primary and secondary sources. The research findings revealed that Islamic scholars have conflicting views regarding the legality of cryptocurrency as a means of exchange to replace the function of paper money and as an investment asset. Nevertheless, cryptocurrency and crypto assets are required today because of Maqasid Shariah, maslahah, and qawaid fiqhiyyah. Future research should focus on the usage and practice of cryptocurrency worldwide and its legal application in specific countries.
 Keywords: cryptocurrency, currency, investment

Complementing Money Functions: Central Bank Digital Currencies and Currency Competition

Central bank digital currencies (CBDCs) are currently one of the most vital issues in monetary policy worldwide. While several aspects of the emergence of digital currencies have been addressed in the respective literature, little focus has been directed to one important underlying parameter: the new role of technology in the digital age, which complements the traditional money functions and hence may exert an effect on currency competition. In this paper, we first provide an overview of money functions, currency competition and digital money. We then state that with the emergence of CBDCs, technology has become a new and important functional parameter born by the CBDC itself. We conclude that while technological competition has arisen as a factor of currency competition, stability remains its most decisive factor.

PHILOSOPHY OF MONEY AS FOUNDATIONAL FRAMEWORK FOR THE CONCEPTUAL ORDER OF THE INTERNATIONAL MONETARY AND FINANCIAL SYSTEM

This article delves into the foundational philosophy of money, exploring its pervasive influence on the conceptual framework of the global financial and monetary systems. Tracing philosophical attitudes towards money from ancient to modern times, it critically examines the moral and ethical tensions inherent in the relationship between money and truth. The analysis begins with classical antiquity, where philosophers like Plato and Aristotle juxtaposed the pursuit of truth with the economic functions of money, viewing it as a morally corrupting influence that impedes the genuine search for wisdom. The narrative progresses through history, highlighting how subsequent philosophers have consistently mirrored this scepticism towards the monetisation of human values. The discussion extends into modern philosophical interpretations, notably Georg Simmel’s “Philosophy of Money,” which articulates money’s dual role as both a disruptor and an integrator within society. Simmel’s analysis portrays money as a fundamental mediator in social relations, yet also a catalyst for alienation and reification, reflecting a deeper philosophical inquiry into the nature of value and the ethical implications of economic interactions. By engaging with these philosophical discourses, the article aims to provide a comprehensive understanding of how money has been perceived and theorised as a force that shapes societal structures and human interactions. It invites readers to reconsider the ethical dimensions of economic practices and the profound impact of monetary philosophy on the fabric of modern society, advocating for a critical reassessment of the values that govern our financial and social systems. Through this exploration, the article contributes to a deeper intellectual discourse on the role of money in shaping not only economic but also cultural and ethical landscapes.

Understanding money; Or, why social and financial accounting should not be conflated

AbstractThis article defines social and financial money as distinct institutions that account for different realms of value. I present a fundamental dichotomy among economists' where orthodox theory defines money as a medium of exchange whereas heterodox chartalist economists characterize it as a unit of account. I argue that (pre)historical data provides clear evidence in support of the heterodox position. The unit of account function of money is exemplified by how wampum accounted for social debts and was expanded to also serve financial functions by European colonial governments. The heterodox position is further evidenced with the metal coins that denominated Rome's financial money that transitioned to serve primarily social purposes in early Anglo‐Saxon Britain. Focusing on the accounting function of social and financial monies transcends the Polanyian special‐versus‐general‐purpose framework that often still structures archaeological practice. With this framework of money defined by what gives it value, I then evaluate recent claims that financial money was integral to the political economies of Bronze Age Europe. I conclude that the adoption of the orthodox assumption that money is primarily a medium of exchange inhibits understanding of what money is and how the political economies of ancient societies were organized.

Imam Ghazali on Money

In this paper, I explore Imam Ghazali’s concept of money and then extend those concepts to explain his ideas regarding ‘Riba’ (interest). In this paper I examine those aspects of Imam Ghazali’s ideas which were overlooked by previous studies. This paper argues that Imam Ghazali views a particular purpose of money, which involves the medium of exchange and a just unit of account while he criticizes the store of value function of money. I also examine the multiple symbols that Imam Ghazali uses to make the point, for example, money as a just ruler, or a mirror that reflects light but has no light of its own. This enables us to further elucidate the crux of Imam Ghazali’s argument which is that money loses its essential nature when store of wealth function become predominant. I also examine the text of the most important passages related to money in Imam Ghazali’s work to support the main arguments in the paper.