How did the gold standard work?

The original pitch was "why does the government have to be involved in currency". You're proposing a hypothetical world where Amazon is a fractional reserve bank, but seemingly subject to no regulations that make it a fractional reserve bank -- because otherwise we're bank in the world where it's operating more or less as a government, except no longer even indirectly accountable to voters -- but also presumably there still exists a state that's regulating Amazon's balance sheet to enforce the trust of the balance sheet. So it still boils down to that the state's monopoly on the use of force is what guarantees the balance sheet is what guarantees the currency.

In some bizarre ancap reality where there are multi-trillion dollar rug pulls because there's no stock regulation and every company uses their stock to leverage themselves into an unregulated fractional reserve bank and we also have some other third party non-governmental market maker scrip converting institution that tells you how many BezosBucks to a YahooYuan, then yes, I guess you have a world where no state is backing the currency. I would argue that the institutions that govern this process would still become quasi-sovereign.

I don't really accept the Scottish retail bank note system as being non-state backed. For at least the last 200 years there has been some kind of regulatory linkage between the apparent retail bank note and the backing of a sovereign state. I can't speak to the deeper history here, but whether or not there exists song legal- or regulatory- jiu-jitsu, at some point somewhere down the stack a government is guaranteeing it.

> The original pitch was "why does the government have to be involved in currency". You're proposing a hypothetical world where Amazon is a fractional reserve bank, but seemingly subject to no regulations that make it a fractional reserve bank -- because otherwise we're bank in the world where it's operating more or less as a government, except no longer even indirectly accountable to voters -- but also presumably there still exists a state that's regulating Amazon's balance sheet to enforce the trust of the balance sheet. So it still boils down to that the state's monopoly on the use of force is what guarantees the balance sheet is what guarantees the currency.

No regulation, apart from standard contract law.

Just like, eg, a shoe factory by and large doesn't have special shoe regulation. And we don't say that the government is particularly involved in producing shoes.

I am not arguing against any taint of government at all here. Just that government need be involved no more than in the production of shoes or any other widget.

Why does Amazon need to be subject to voters? They are subject to control by shareholders and the whim of consumers.

The Scottish banking system of the 19th century was close to what I describe. The current Scottish system ain't. (Similar for the Canadian system.)

Governments were emphatically not backing these. That's part of why they worked: customers and business partners were incentivized to keep an eye on their bank's balance sheet.

I don't get your argument about the (quasi) sovereignty? Amazon already issues gift cards today, and what I describe could evolve gradually from there (with some loosening of regulations) without Amazon acquiring anything like sovereignty in the process.

See also how mobile phone service providers got into financial services in many poor countries. That development was at first completely unplanned by the companies and driven by customers trading airtime vouchers (or rather the codes on them) as if they were money. Later on the companies added the ability to transfer balances.

No sovereignty involved; unless you have a very expansive definition of that concept?

> In some bizarre ancap reality where there are multi-trillion dollar rug pulls because there's no stock regulation and every company uses their stock to leverage themselves into an unregulated fractional reserve bank and we also have some other third party non-governmental market maker scrip converting institution that tells you how many BezosBucks to a YahooYuan, then yes, I guess you have a world where no state is backing the currency. I would argue that the institutions that govern this process would still become quasi-sovereign.

I'm not sure how you do rug pulls in this setting? There's still normal contract liability; and Amazon would contractually promise to redeem their notes in a base unit that Amazon doesn't control.

(You can also have pure fiat systems, were Amazon backs are not redeemable in anything else. But historically, customers only accepted private notes redeemable in some outside money.)

As an aside: in practice these sort of systems also work without a government enforcing things. See https://en.wikipedia.org/wiki/Hawala for an example of similar systems. (But let's not discuss that too much; I only wanted to make the weaker claim that money-printing doesn't need special regulation, and can be treated like any other general industry.)