Bringing back the Somali shilling
jpkoning.blogspot.com
Bringing back the Somali shilling
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Re: Bringing back the Somali shilling
#2This article ignores the fact that no one in Somalia uses the shilling any more^. In fact no one really uses money any more. Most banking and financial transactions are done using mobile credit, similar to Kenyas M-PESA.
This has significant advantages for Somalis. Mohamed in Mogadisho can ask his cousin Mohamed in Minnesota to pay for his meal and all Minnesota Mohamed has to do is transfer the money on his phone.
Why would Somalis go back to the shilling? If anything they'll just go back to the USD which has been the staple far longer than anything else.
^Ok I'm being excessive. It is in use but its use is made redundant by access to mobile technology. Those at the poorer end of society still depend on the shilling but even the nomadic pasturalists these days have mobiles and conduct their trade using mobile money.
Edit: One has to wonder if the new TFG in Somalia is re-introducing bank notes to try to damage the hold that the big Telcos have on Somalias financial institution. Considering some of the Telcos are in bed with Al Shabab It's probably in their interest to curtail their power.
Re: Bringing back the Somali shilling
#3This article ignores the fact that no one in Somalia uses the shilling any more^. In fact no one really uses money any more. Most banking and financial transactions are done using mobile credit, similar to Kenyas M-PESA. This has significant advantages for Somalis. Mohamed in Mogadisho can ask his cousin Mohamed in Minnesota to pay for his meal and all Minnesota Mohamed has to do is transfer the money on his phone. W…
I think the article is in violent agreement with you (at least the latter half of it). It in fact argues just that - they shouldn't go back to the shilling, precisely because nobody uses it (and instead they should go dollar/mobile/etc).
Re: Bringing back the Somali shilling
#4This article ignores the fact that no one in Somalia uses the shilling any more^. In fact no one really uses money any more. Most banking and financial transactions are done using mobile credit, similar to Kenyas M-PESA. This has significant advantages for Somalis. Mohamed in Mogadisho can ask his cousin Mohamed in Minnesota to pay for his meal and all Minnesota Mohamed has to do is transfer the money on his phone. W…
I think the article is in violent agreement with you (at least the latter half of it). It in fact argues just that - they shouldn't go back to the shilling, precisely because nobody uses it (and instead they should go dollar/mobile/etc).
Oh you're right. Strange that the full page didn't load on my phone. My mistake, thanks for pointing that out.
Re: Bringing back the Somali shilling
#5This highlights well some of the conversations I have with folks who want to replace fiat currencies with cryptocurrencies. Sure, one can design a better monetary system, but that doesn't mean people are going to want to use it.
You have to incentivize and enable people in order to get them to change.
M-PESA and the similar mobile money telecom products are doing more for digitizing and disrupting fiat currencies than cryptocurrencies are currently. Bitpesa is having some success as a bridge between the two, but it's going to be a struggle for any cryptocurrency or token to surpass the usability of digital currencies tied to the devices they already use and th kiosks / storefronts around them.
Re: Bringing back the Somali shilling
#6Gold coins are a proof-of-word currency.
Re: Bringing back the Somali shilling
#7This highlights well some of the conversations I have with folks who want to replace fiat currencies with cryptocurrencies. Sure, one can design a better monetary system, but that doesn't mean people are going to want to use it. You have to incentivize and enable people in order to get them to change. M-PESA and the similar mobile money telecom products are doing more for digitizing and disrupting fiat currencies tha…
It's actually similar to a cryptocurrency in a lot of ways. Decentralized, based on a common algorithm (the design of the 1000 Shilling note), with a price eventually stabilizing on the mining (counterfeiting) cost.
Re: Bringing back the Somali shilling
#8I crazy idea I had was using counterfeiters to mint money.
Make it so that the manufacturing cost of a $100 bill is $100 minus the amount you want the counterfeiter to make, so for $1 say $99. Include tons of security features, use silk, gold, diamond dust, whatever. Then just let the market do it's thing.
Have money testing machines that shred fake bank notes at sight. You may or may not want to keep punishments for using fake bank notes. You just want to keep a little bit of pressure to keep the manufacturing costs so high that you control monetary supply. (Now that I think about it, supply of bank notes != monetary supply. You'd have to physically print A LOT to shift the value of a currency notably.)
There are a ton of reasons why this wouldn't work or wouldn't be a good idea. For one, a complete waste of resources. Also, you wouldn't have as much control over the money supply. And advances in technology change the production rate and profits from printing rapidly.
All of those caveats also apply to Bitcoin, of course.
Re: Bringing back the Somali shilling
#9I crazy idea I had was using counterfeiters to mint money. Make it so that the manufacturing cost of a $100 bill is $100 minus the amount you want the counterfeiter to make, so for $1 say $99. Include tons of security features, use silk, gold, diamond dust, whatever. Then just let the market do it's thing. Have money testing machines that shred fake bank notes at sight. You may or may not want to keep punishments for…
In practice at scale a high quality replica is far cheaper to make than the note it denominates
Re: Bringing back the Somali shilling
#10>Panama has been using the dollar for decades, and this hasn't prevented it from becoming one of Central America's most successful n̶a̶t̶i̶o̶n̶s̶ tax havens.
https://www.theatlantic.com/business/archive/2016/04/panama-...
Fixed that for you :)
Control over your currency is critical for maintaining national sovereignty, and the author waves it away like nothing. Just take what the EU forced upon Greece:
https://en.wikipedia.org/wiki/Greek_government-debt_crisis_c...