Coins have never had a monopoly on being the only form of tangible cash. Intrinsic value or specie coinage has always had strong acceptance. Fiat money, not so much. Paper money, backed by something physical or not, has continued to be accepted as a form of currency since it was first introduced in China in the 11th century (Maybe as early as the 7th century). In more modern history, checks, credit and debit cards, and finally electronic transfers have entered the mix. Each of these can be argued to be a form of fiat money.
What makes electronic transfers including Bitcoin and other nebulous unbacked forms of fiat cyber cash different is that they don’t exist physically. Well, they haven’t existed physically until now.
Physical rather than digital Bitcoin-backed ‘bank’ notes are being planned through a new company called Noteworthy. Noteworthy is headed by former director of the U.S. Department of the Treasury Bureau of Engraving and Printing Larry Felix with Bitcoin Foundation Founding Chairman Peter Vessenes.
According to a March 9 BusinessWire.com report, “Noteworthy’s physical cryptocurrency bank note marries the utility and security from the paper money, digital asset, and blockchain industries. Equipped with a secure cryptographic microprocessor and utilizing all of the bank note industry’s highest security features, Noteworthy notes will look and feel like top-of-the-line currency while providing the highest grade of digital security directly embedded in each note. Users will be able to interact with the notes through Noteworthy’s mobile app, further bridging the gap between the physical and digital.”
The article quotes Felix as saying, “I am thrilled to lead this transformative project. A physical bank note provides a level of trust, familiarity, and accessibility that digital assets on their own have yet to achieve. I look forward to working with the Noteworthy team to create a beautifully designed, easy-to-use, counterfeit-resistant bank note of the highest quality.”
If you need a physical bank note to provide a level of trust and familiarity, isn’t that what a bank note already offers? Bank notes are issued by banks and backed by trust in the government and the economy of the country that issues them. Cyber money is backed by the trust someone has in a form of digital currency that only exists online. Shouldn’t Noteworthy’s notes be more correctly called cryptocurrency notes or scrip?
Noteworthy appears to be re-inventing the wheel. The company has even hired experienced bank note image engraver Thomas Hipschen as it replaces physical bank notes and coins with electronically generated cryptocurrency, then comes full circle back to physical notes.
Vessenes said, “I think of this project as ‘Bitcoin has hired the world’s best bank note team. When I started working in Bitcoin, 1 BTC was worth less than $0.0005. Today we’re discussing a $50,000 bank note. That’s an incredible thing and I’m super excited that Larry, Manuela, and Thomas are bringing it to life!”
No bank note of a face value this high is currently in circulation anywhere in the world. Bank note issuing entities including Canada and the European Union have been lowering the face value of bank notes available to the public in an effort to discourage criminals from being able to hide wealth or launder money in some physical form of cash.
According to the Noteworthy.ag web site, “The all stars of the bank note industry join forces with crypto innovators to bring Bitcoin-backed bank notes to the world.”
Cryptocurrency notes may leave proponents of a cashless society scratching their heads, but it may also leave bank note collectors wondering if this might become the next numismatic collectible.