Money with expiry dates


The purpose of money is to get people to do meaningful things together. People who have money decide what's meaningful, and people who want money try to be the ones who get to do it. But there's a slight problem with money: it's only useful when it's actually used, and sometimes a long time passes by between earning and using.

Having a stockpile of money might be nice, I suppose, but society as a whole would probably have better use of it elsewhere.

So I was thinking a bit about digital money, and started thinking about this aspect: what effect would an "expiry date" on money would have? What if we set a termination date on each dollar or euro, and after that date said dollar or euro would cease to be money?

The effect would no doubt not be that rich people would lose their money, but it would mean that every single part of a fortune would need to be shifted around at least as often as the money expires. Take the old money out, put new money in. This would also mean that it would be impossible for e.g. robbers to hide their loot for a long time and then start using it once everyone has forgotten about it. It would possibly make it harder to hide money away from taxation too, since the old-out/new-in transactions can be monitored. It would be a bit like making dark matter visible; today money that's sitting in an account is invisible from the outside and can stay that way for a long time.

So those are a few effects that would beneficial to government, but how about the rest of society? A similar economy is the mooncake vouchers black market in China, where vouchers for mooncake are in effect money with an expiry date - after the mid-autumn festival the vouchers expire and can no longer be exchanged for mooncake. It's a bit like a currency backed with pastries - should at least be more stable than Bitcoin!

In my version the expiry dates would be longer than for the pastries, maybe three or five years.

One effect is that money very close to its end-of-life would likely drop in value, since there's less time left to use it. Another effect is that people would try to trick others into accepting money that'll soon expire; getting you paycheck in money that expires tomorrow wouldn't be too useful.

Then there's the question of who gets to create new money, how that would be done, and if it should be possible to exchange old money for new, possibly at some exchange rate.

In the 1930s something like this was tried in the Austrian town of Wörgl. It's called The Wörgl Experiment or "the miracle of Wörgl". According to the Wikipedia page:

The experiment resulted in a growth in employment and meant that local government projects such as new houses, a reservoir, a ski jump and a bridge could all be completed, seeming to defy the depression in the rest of the country. Inflation and deflation are also reputed to have been non-existent for the duration of the experiment.