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EРCУБOРNИOКMАY

Pavle Gacov

The author is President
of the Assembly of

Accountants’ Association of
the Republic of Macedonia

Electronic instead of physical money – modern solution for modern times

ONE SYSTEMIC MEASURE IN THE FIELD OF
FINANCE WHICH CAN IMPROVE THE OVERALL
SOCIAL-ECONOMIC SITUATION AND LIMIT
CORRUPTION

Macedonia must say goodbye to physical / material money
The history of monetary finance
knows different models of mon- tion, primarily within the limits of the own
ey which were used in different country, and beyond it only in exceptional
social-economic conditions and circumstances and in conditions when it is
a matter of internationally accepted cur-

in appropriate levels of develop- rency.

ment of the society. Money as a means of ex- Few years ago, particularly on the pages

change is primarily intended to facilitate ex- of this magazine, I affirmed the need of

change, to terminate the complex chain of complete digitalization of money, empha-

exchange of a good for a good, service for a sizing the positive aspects of such a mod-

service, that is, a good for a service, and vice ern monetary regime. Let us be clear, the

versa. Such termination actually facilitates affirmation of this model does not refer to

the exchange and enables to keep the money so called coins (they are not the subject mat-

as a means of exchange and enables the de- ter of analysis of this text), rather it refers to

layed exchange. The monetary economists complete replacement of physical money in

know well that after leaving the barter as circulation (denars) with electronic money

a regime of exchange, various forms of spe- (e-denars) issued in accordance with the

cial natural goods have been used as money: monetary policy of the National Bank and

natural goods (the famous stones from the completely controlled by the monetary pow-

island of Borneo, salt a means of exchange), er. Let us illustrate that for every electronic

gold and silver. This is followed by the sur- transaction, the business bank will transfer

rogates of real precious metals in form of an appropriate amount of e-denars from

certificates for owned gold, banknotes and the account of the entity that performs pay-

coins – completely gold plated, however also ment, in favor of the business bank where

certificates without real coverage, all the the entity-creditor has an account. Such pay-

way to present day money which have state ment will not be possible if the debtor does

nominated value and which apart from not possess sufficient amount of denars on

physical form, usually have a digital form of his account in a business bank (or another

transaction or digital money. Money today depository institution). Digital money is

do not have their own value, their value is owned only by the ones who earned them,

nominated by the country. For this reason that is, the ones who borrowed them. Their

every national currency performs its func- only emitter is the Central Bank.

56 November 2016