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Old 04-26-2021, 12:51 PM   #9
Anthony
 
Join Date: Feb 2005
Location: Berkeley, CA
Default Re: Grain-based local currencies in medieval fantasy games

I suspect the koku is a bit different, in that it's a persistent currency with a defined value of 1 certain quantity of rice, rather than a transient currency.

I suspect as a practical issue, being able to actually redeem the currency for rice was erratic. If you have currency nominally backed by something else, you have two choices:
  1. Actually store enough of the material to pay back the currency.
  2. Just keep enough on hand to handle the expected rate of withdrawal. This may result in the bank defaulting.
Option 1 sort of works with precious metals (though it's not great even there), option 2 is mostly what actually happens. The problem for grain is that the money supply shrinks in exactly the situations where you want the money supply to expand.
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